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Exporting against Risk? Theory and Evidence from Public Export Insurance Schemes in OECD Countries

Baltensperger, Ernst ; Herger, Nils

In: Open Economies Review, 2009, vol. 20, no. 4, p. 545-563

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    Title
    • Exporting against Risk? Theory and Evidence from Public Export Insurance Schemes in OECD Countries
    Author
    • Baltensperger, Ernst. Department of Economics, University of Berne, Schanzeneckstrasse 1, Postfach 8573, 3001, Berne, Switzerland
    • Herger, Nils. Department of Economics, University of Berne, Schanzeneckstrasse 1, Postfach 8573, 3001, Berne, Switzerland
    Document Type
    • Postprint
    Language
    • English
    Published in
    • Open Economies Review, 2009, vol. 20, no. 4, p. 545-563. Springer US; http://www.springer-ny.com
    Other Version
    OAI-PMH Identifier
    • oai:doc.rero.ch:315672
    Summary
    This paper endeavours to find out in how far public export insurance schemes foster international trade. Thereto, a gravity equation is derived, which accounts for the risk of financial losses in case firms contract defaulting foreign buyers. Empirical results suggest that OECD countries issuing trade credits with generous state-guarantees did not, during the 1999 to 2005 period, witness more exports towards politically and commercially more unstable low-income countries. Rather, publicly indemnified trade finance has promoted exports, to a modest degree, towards high and middle-income countries, where financial intermediaries and markets provide viable alternatives to hedge against payment risks