Export Credit Guarantees, Moral Hazard and Exports Quality

María del Carmen García‐Alonso, Paul Levine () and Antonia Morga
Authors registered in the RePEc Author Service: Maria del Carmen Garcia-Alonso

Bulletin of Economic Research, 2004, vol. 56, issue 4, 311-327

Abstract: We analyse the role played by export credit guarantees (ECGs) in encouraging exports to developing countries. The existence of moral hazard on the side of the firm is introduced. We show that the inability of the exporter's government to verify the actual quality of the product will limit its ability to encourage trade through ECGs, once the coverage provided goes beyond a certain threshold. This result provides a rationale behind the limited coverage on ECGs.

Date: 2004
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Citations: View citations in EconPapers (6)

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https://doi.org/10.1111/j.1467-8586.2004.00206.x

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Working Paper: Export Credit Gurantees, Moral Hazard and Exports Quality (2004)
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