2006
DOI: 10.2139/ssrn.944779
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Political Risk and Export Promotion: Evidence from Germany

Abstract: Political risk represents an important hidden transaction cost that reduces international trade. This paper investigates the claim that German public export credit guarantees (Hermes guarantees) mitigate this friction to trade ows and hence promote exports. We employ an empirical trade gravity model, where we explicitly control for political risk in the importing country in order to evaluate the eect of export guarantees. The idea behind export promotion through public export credit agencies (ECAs) is that the… Show more

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Cited by 24 publications
(55 citation statements)
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References 30 publications
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“…1 Leaving aside macroeconomic measures such as exchange rate policy, some of these instruments provide firms directly with financial resources or help them indirectly to cope with a credit crunch. These include direct subsidies associated with export requirements (Helmers and Trofimenko, 2013;Defever and Riaño, 2014) and export credit guarantees (Abraham and Dewit, 2000;Egger and Url, 2006;Moser et al, 2008;Felbermayr and Yacin, 2013). Some other policies that subsidize firms directly do not target exports, but are likely to affect them, for example production subsidies , support to invest in technology, training, and physical capital (Görg et al, 2008), VAT reimbursement rules (Gourdon et al, 2014), and preferential regulation and taxation in economic development zones (Schminke and Van Biesebroeck, 2013).…”
Section: Defining Export Promotionmentioning
confidence: 99%
“…1 Leaving aside macroeconomic measures such as exchange rate policy, some of these instruments provide firms directly with financial resources or help them indirectly to cope with a credit crunch. These include direct subsidies associated with export requirements (Helmers and Trofimenko, 2013;Defever and Riaño, 2014) and export credit guarantees (Abraham and Dewit, 2000;Egger and Url, 2006;Moser et al, 2008;Felbermayr and Yacin, 2013). Some other policies that subsidize firms directly do not target exports, but are likely to affect them, for example production subsidies , support to invest in technology, training, and physical capital (Görg et al, 2008), VAT reimbursement rules (Gourdon et al, 2014), and preferential regulation and taxation in economic development zones (Schminke and Van Biesebroeck, 2013).…”
Section: Defining Export Promotionmentioning
confidence: 99%
“…In line of this reasoning many countries provide trade credits to ensure exporters against the risk of international market transactions. Moser et al (2006) conclude that "Hermes trade credits" in Germany have increased exports on an aggregate level. Görg et al (2007) argue that export grants in Ireland have increased the export share of exporting firms but were not able to turn non-exporters into exporters.…”
mentioning
confidence: 94%
“…The implied convergence rate would be about 29%. Moser et al (2008) and Martinez-Zarzoso et al (2009) focus on German exports. Using the estimates reported by the former, the adjustment rate is about 71%, whereas the latter find adjustment rates of 39%.…”
Section: Presentmentioning
confidence: 99%
“…Micco et al (2003) and De Nardis et al (2008) study the dynamic effect of the Euro on bilateral trade, and Moser et al (2008) and Martinez-Zarzoso et al (2009) analyze the effect of German export promotion. All these studies, however, rely on ad hoc specifications of the dynamic gravity equation.…”
Section: Introductionmentioning
confidence: 99%