Creating Creditworthiness through Reciprocal Trade

Dalia Marin and Monika Schnitzer ()

Review of International Economics, 2003, vol. 11, issue 1, 159-174

Abstract: The paper investigates how barter can be used to finance imports and restore the creditworthiness of highly indebted countries when reputation as an enforcement mechanism for credit repayment does not work. The authors argue that payments in goods can be used to collateralize a trade credit and thus improve the creditor's incentives to pursue defaulting debtors. Furthermore, it is shown that barter is particularly advantageous if export revenues of the debtor country are stochastic, even in the absence of risk aversion. The predictions of the model are consistent with data on actual barter contracts.

Date: 2003
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://doi.org/10.1111/1467-9396.00375

Related works:
Working Paper: Creating creditworthiness through reciprocal trade (2003)
Working Paper: Creating Creditworthiness through Reciprocal Trade (1995)
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:bla:reviec:v:11:y:2003:i:1:p:159-174

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0965-7576

Access Statistics for this article

Review of International Economics is currently edited by E. Kwan Choi

More articles in Review of International Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().