Webinar Series



EXIM’s Exit: The Real Effects of Trade Financing by Export Credit Agencies

This paper studies the role of export credit agencies—the predominant tool of industrial policy—on firm behavior by using the effective shutdown of the Export-Import Bank of the United States (EXIM) from 2015-2019 as a natural experiment. The paper shows that firms that previously relied on EXIM support saw a 18% drop in global sales after the agency closed down, driven by a reduction in exports. Firms affected by the shutdown were unable to make up for the loss of trade financing, especially if they were financially constrained, and consequently laid off employees and curtailed investment. These negative effects were more pronounced for firms with higher export opportunities and higher ex-ante marginal revenue products of capital. Lower exports at the firm level aggregate up to lower total exports for industries most reliant on EXIM support. These findings suggest that government policies aimed at providing trade financing can boost exports and firm growth even in countries with well-developed financial markets without necessarily leading to a misallocation of resources.


Session Chair: Bernard YEUNG
Emeritus Professor, NUS Business School, National University of Singapore

10:00 am
The Mandarin Model of Growth

Zheng (Michael) SONG, Wei Lun Professor of Economics, Head of the Department of Economics, Chinese University of Hong Kong and Senior Fellow, ABFER

Wei XIONG, Professor in Finance, Professor of Economics Department of Economics and Bendheim Center for Finance; Princeton University and Senior Fellow, ABFER
10:25 am
Loren BRANDT, Professor of Economics, Noranda Chair in Economics and International Trade, Economic Development of China, University of Toronto
10:50 am
11:10 am

Updated 21 Mar 2024

Session Format

Each session lasts for 1 hour 10 minutes (25 minutes for the author, 25 minutes for the discussant and 20 minutes for participants' Q&A). Sessions will be recorded and posted on ABFER website, except in cases where speakers or discussants request us not to.


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