Destination Trade Credit and Exports: Evidence from Cross Country Panel Data

Changyuan Luo, Shuai Zeng and Laixun Zhao
Additional contact information
Changyuan Luo: Institute of World Economy, Fudan University, CHINA
Shuai Zeng: School of Economics, Fudan University, CHINA

No DP2023-15, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: We examine the impact of destination trade credit (DTC) on exports, using cross-country panel data for 2000-2018 and focusing on financing by foreign trade partners. We find DTC promotes a country's exports disproportionately more in liquidity-dependent industries, a consistent result after addressing endogeneity and various robustness tests. DTC mainly promotes trade by increasing export quantity, while lowering export prices and export varieties. Further, the effect is greater if the level of financial development of the source country is lower, but smaller if the product complexity of industries becomes higher. During the 2008 global financial crisis, DTC also contributes to export expansion, but the effect is relatively small.

Keywords: Informal finance; Destination trade credit; Exports; Cash in advance; Deferred payment (search for similar items in EconPapers)
JEL-codes: F10 G20 G30 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2023-06
New Economics Papers: this item is included in nep-fdg and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Destination trade credit and exports: Evidence from cross-country panel data (2023)
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