Why Do Trade Finance Gaps Persist: Does it Matter for Trade and Development?

Arbeitspapier

Trade finance shortfalls now appear regularly. Does this matter for trade expansion and economic development in developing countries? Global trade finance has resumed following the 2009 global financial crisis. However, the pattern of recovery has been uneven across countries and categories of firms. The recovery has been robust for the main routes of trade and for large trading companies. By contrast, access to trade finance remains costly and scarce in countries which have the strongest potential for trade expansion. The policy response to this problem depends on whether this represents a market failure, or a new global equilibrium. We introduce new data from a global survey of firms to argue that real shortfalls are exacerbated by perception gaps in a way that has enabled market failures to persist. This has troubling implications most directly through its effect on the ability for small firms to benefit from the reallocation of production and investment within global supply chains.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 6425

Classification and Topics

• Classification: Wirtschaft ; Trade Policy; International Trade Organizations ; International Lending and Debt Problems ; Financial Aspects of Economic Integration ; International Linkages to Development; Role of International Organizations ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
• Subject: international financial institutions ; coherence ; G-20 ; financial crisis ; trade and development ; trade finance ; economic development

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Auboin, Marc ; DiCaprio, Alisa
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/161864
• Last update: 10.03.2025, 11:42 AM CET