International trade and letters of credit: A double-edged sword in times of crises

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buir.contributor.authorDemir, Banu
buir.contributor.orcidDemir, Banu|0000-0003-0183-6099
dc.citation.epage211en_US
dc.citation.issueNumber2en_US
dc.citation.spage185en_US
dc.citation.volumeNumber70en_US
dc.contributor.authorCrozet, Matthieu
dc.contributor.authorDemir, Banu
dc.contributor.authorJavorcik, Beata
dc.date.accessioned2023-02-24T11:24:36Z
dc.date.available2023-02-24T11:24:36Z
dc.date.issued2022-01-05
dc.departmentDepartment of Economicsen_US
dc.description.abstractThis study argues that the ability to mitigate risks associated with international trade is particularly important at times of heightened uncertainty, such as the economic crisis caused by the Covid-19 pandemic. Risk mitigation can be achieved through letters of credit (LCs), trade finance instruments providing guarantees to trading partners. As their use varies across products, exports of some products are more resilient than others during times of increased uncertainty. This situation reverses in times of financial crises when distressed banks may limit the supply of LCs. Our analysis using data on US and EU-15 exports during the Covid crisis and the Global Financial Crisis provides empirical support for these hypotheses. © 2021, International Monetary Fund.en_US
dc.identifier.doi10.1057/s41308-021-00155-3en_US
dc.identifier.issn20414161
dc.identifier.urihttp://hdl.handle.net/11693/111682
dc.language.isoEnglishen_US
dc.publisherPalgrave Macmillan Ltd.en_US
dc.relation.isversionofhttps://dx.doi.org/10.1057/s41308-021-00155-3en_US
dc.source.titleIMF Economic Reviewen_US
dc.subjectInternational tradeen_US
dc.subjectTrade financeen_US
dc.subjectLetter of crediten_US
dc.subjectRisken_US
dc.subjectGlobal financial crisisen_US
dc.subjectCovid-19en_US
dc.titleInternational trade and letters of credit: A double-edged sword in times of crisesen_US
dc.typeArticleen_US

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