Export Credit Gurantees, Moral Hazard and Exports Quality

Maria Garcia-Alonso, Paul Levine () and Antonia Morga

Studies in Economics from School of Economics, University of Kent

Abstract: We analyse the role played by Export Credit Guarantees (ECGs) to encourage 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.

Keywords: export credit guarantees; offsets; moral hazard (search for similar items in EconPapers)
JEL-codes: F12 H56 L10 (search for similar items in EconPapers)
Date: 2004-01
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Citations: View citations in EconPapers (2)

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Journal Article: Export Credit Guarantees, Moral Hazard and Exports Quality (2004)
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