Trade finance matters: evidence from the COVID-19 crisis

Banu Demir and Beata Javorcik

Oxford Review of Economic Policy, 2020, vol. 36, issue Supplement_1, S397-S408

Abstract: This study documents a substantial decline in the exports of major trading nations taking place in March 2020. Accounting for product-specific seasonality and annual trends, the data suggest a drop by 38 per cent in France, about a quarter in Turkey and Germany, and 12 per cent in the US, relative to their historical averages. Detailed export data from Turkey, disaggregated by financing terms, show another striking pattern. Flows using bank intermediation which eliminates or reduces the risk of non-payment or non-arrival of prepaid goods, such as letters of credit or documentary collection, appear to have been much more resilient to the current downturn relative to flows using other financing terms. These findings suggest that access to trade finance is vital during times of heightened uncertainty.

Keywords: COVID-19; trade financing; letters of credit; exports (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
http://hdl.handle.net/10.1093/oxrep/graa034 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
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:oup:oxford:v:36:y:2020:i:supplement_1:p:s397-s408.

Access Statistics for this article

Oxford Review of Economic Policy is currently edited by Christopher Adam

More articles in Oxford Review of Economic Policy from Oxford University Press and Oxford Review of Economic Policy Limited
Bibliographic data for series maintained by Oxford University Press ().