Bank Linkages and International Trade

Sergey Borisov, Julian Caballero, Christopher Candelaria and Galina Hale

No 2013-14, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: We show that bank linkages have a positive effect on international trade. We construct the global banking network (GBN) at the bank level, using individual syndicated loan data from Loan Analytics for 1990-2007. We compute network distance between bank pairs and aggregate it to country pairs as a measure of bank linkages between countries. We use data on bilateral trade from IMF DOTS as the subject of our analysis and data on bilateral bank lending from BIS locational data to control for financial integration and financial flows. Using gravity approach to modeling trade with country-pair and year fixed effects, we find that new connections between banks in a given country-pair lead to an increase in trade flow in the following year, even after controlling for the stock and flow of bank lending between the two countries. We conjecture that the mechanism for this effect is that bank linkages reduce the risk exporters face and present four sets of results that supports this conjecture.

Keywords: Monetary; policy (search for similar items in EconPapers)
Pages: 41 pages
Date: 2013
New Economics Papers: this item is included in nep-ban
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.frbsf.org/economic-research/files/wp2013-14.pdf (application/pdf)

Related works:
Journal Article: Bank linkages and international trade (2018)
Working Paper: Bank Linkages and International Trade (2013)
Working Paper: Bank Linkages and International Trade (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedfwp:2013-14

Ordering information: This working paper can be ordered from

DOI: 10.24148/wp2013-14

Access Statistics for this paper

More papers in Working Paper Series from Federal Reserve Bank of San Francisco Contact information at EDIRC.
Bibliographic data for series maintained by Federal Reserve Bank of San Francisco Research Library ().