Bank Financing of Global Supply Chains

Laura Alfaro, Mariya Brussevich, Camelia Minoiu and Andrea Presbitero

No 33754, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Finding new international suppliers is costly, so most importers source inputs from a single country. We match shipment data with the U.S. credit register to analyze the role of banks in mitigating trade search costs during the 2018-2019 U.S.–China trade tensions. Importers of tariff-hit products from China were more likely to exit relationships with Chinese suppliers and to find new suppliers in other Asian countries. To finance their geographic diversification, tariff-hit firms increased credit demand, drawing on credit lines and taking out loans at higher rates. Banks offering trade finance services in Asia eased both financial and information frictions.

JEL-codes: F34 F42 G21 (search for similar items in EconPapers)
Date: 2025-05
New Economics Papers: this item is included in nep-cna, nep-opm and nep-sea
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Working Paper: Bank Financing of Global Supply Chains (2025)
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