Financial shocks and trade finance: Evidence from Korea

Hwang, Sangyeon; Im, Hyejoon

doi:10.1016/j.econlet.2013.04.005

Cited by 12 publications

(7 citation statements)

References 5 publications

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“…This is particularly the case when adverse shocks result in banks, and more generally, the financial sector, tightening financial conditions, both in domestic financial markets and international financial markets (e.g., Amiti and E 2011;Feng and Ching-Yi 2013;De Nicola and Shawn 2017;Spatareanu et al 2018). For example, during a global financial crisis (e.g., the 2008 financial crisis), liquidity tightens in the international financial markets, and this raises the costs of trade finance (e.g., Auboin and Moritz 2003;Hwang and Hyejoon 2013). Hwang and Hyejoon (2013) empirically discovered that in Korea, financial shocks generally have a negative effect upon credit availability, and this negative effect lasts for at least three months, which implies significant delays and losses for traders.…”

Section: Measurement Of Export Resiliencementioning

confidence: 99%

Development Aid and Export Resilience in Developing Countries: A Reference to Aid for Trade

Gnangnon

2022

Economies

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The COVID-19 pandemic, as with previous major crises, such as the 2008 financial crisis, has had a severe negative impact on international trade flows. The present paper aims to contribute to the debate concerning how to foster resilience against future crises, in terms of countries’ aggregate exports, by examining the effect of development aid (i.e., so-called official development assistance), particularly the impact of the Aid for Trade (AfT) component, upon export resilience. The resilience of exports refers to the ability of countries’ aggregate exports to resist shocks, regardless of whether they are environmental or external shocks. The core argument of the analysis is that development aid would affect export resilience through its impact upon productive capacities. The analysis covers 93 developing countries over the period 2002–2018. The findings indicate that the total development aid flows, including both AfT flows and NonAfT flows, exert a positive effect upon export resilience. Among AfT components, AfT for productive capacities appears to exert a greater positive effect upon export resilience than AfT for economic infrastructure and AfT for trade policy and regulation. In addition, development aid (regardless of which aid variable is considered) exerts the greatest positive effect upon export resilience in countries (such as the least developed countries—LDCs) that have the lowest productive capacities. These findings highlight the need for donor countries to supply higher development aid flows, in particular, AfT flows, to countries such as LDCs that have low productive capacities.

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Section: Measurement Of Export Resiliencementioning

confidence: 99%

Development Aid and Export Resilience in Developing Countries: A Reference to Aid for Trade

Gnangnon

2022

Economies

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“…This is particularly the case when the adverse shocks result in the tightening of financial conditions by banks and more generally by the financial sector both in the domestic financial market and the international financial markets (e.g., Amiti and Weinstein, 2011;Feng and Lin, 2013;De Nicola and Tan, 2017;Spatareanu et al, 2018). For example, during a global financial crisis (e.g., the 2008 financial crisis), liquidity tightened in the world financial markets, and this raises the costs of trade finance (e.g., Auboin and Meier-Ewert, 2003;Hwang and Im, 2013). Hwang and Im (2013) have found empirically for Korean that financial shocks have generally a negative effect on credit availability, and this negative effect lasts at least three months, which implies significant delays and losses for traders.…”

Section: Measurement Of Export Resiliencementioning

confidence: 99%

“…For example, during a global financial crisis (e.g., the 2008 financial crisis), liquidity tightened in the world financial markets, and this raises the costs of trade finance (e.g., Auboin and Meier-Ewert, 2003;Hwang and Im, 2013). Hwang and Im (2013) have found empirically for Korean that financial shocks have generally a negative effect on credit availability, and this negative effect lasts at least three months, which implies significant delays and losses for traders.…”

Section: Measurement Of Export Resiliencementioning

confidence: 99%

Development Aid and Export Resilience in Developing Countries: A Reference to Aid for Trade

Sk¹

2021

Preprint

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The COVID-19 pandemic, like previous major crises, such as the 2008 financial crisis, has had a severe negative impact on international trade flows. International institutions are now exploring ways to help their member states recover from the health crisis, and foster the resilience of their economies to future crises. As far as trade is concerned, institutions that deal primarily with trade matters are making effort to help their member states foster the resilience of their trade performance to future shocks. In this context, the World Trade Organization (WTO), which is the only international organization that deals with the global rules of trade between nations, has organized a series of events since the onset of the COVID-19 pandemic. It has now planned to hold in September 2021 the 2021 WTO Public Forum whose theme is "Trade Beyond COVID-19: Building Resilience". The present paper aims to contribute to this debate by examining the effect of development aid, i.e., the so-called official development aid, in particular its Aid for Trade (AfT) component, on export resilience. The resilience of exports refers to the capacity of countries' aggregate exports to resist to shocks, whether environmental or external shocks. The core argument of the analysis is that development aid would affect export resilience through its effect on productive capacities. The analysis covers 93 developing countries over the period 2002-2018. The findings indicate that total development aid flows, including both AfT flows and NonAfT flows exert a positive effect on export resilience. Among AfT components, AfT for productive capacities appears to exert a higher positive effect on export resilience than AfT for economic infrastructure and AfT for trade policy and regulation. In addition, development aid (whatever the aid variable considered) exerts the highest positive effect on export resilience in countries (such as Least developed countries - LDCs) that have the lowest level of productive capacities. These findings highlight the need for donor-countries to supply higher development aid flows, in particular AfT flows to countries such as LDCs that have low levels of productive capacities.

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“…Trade credit is commercial financing in which a supplier allows a customer to purchase goods and/or services on the account without making immediate payments. It has a short maturity and is associated with few formal restrictions (Hwang & Im, 2013). It is an important external source of funds used by firms (Rajan & Zingales, 1995).…”

Section: Introductionmentioning

confidence: 99%

Boardroom attributes and trade credit under different ownership structures

et al. 2020

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The effects of boardroom attributes on trade credit may differ depending on the types of ownership structures. The study provides new evidence on simultaneously four categories of boardroom characteristics (i.e., the board size, independence, assiduity, gender diversity) under different ownership structures. The empirical analysis shows that board independence is positively associated with trade credit for firms with dispersed and managerial ownership, whereas it is negatively associated with trade credit for firms with concentrated ownership. Moreover, the presence of women on boards is negatively linked to trade credit regardless of the ownership structure, which suggests the risk‐averse tendency of female directors.

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Financial shocks and trade finance: Evidence from Korea

Cited by 12 publications

References 5 publications

Development Aid and Export Resilience in Developing Countries: A Reference to Aid for Trade

Development Aid and Export Resilience in Developing Countries: A Reference to Aid for Trade

Development Aid and Export Resilience in Developing Countries: A Reference to Aid for Trade

Boardroom attributes and trade credit under different ownership structures

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