Working Paper

What do we know about the relationship between access to finance and international trade?

Abstract: In part as a response to the recent financial crisis, the relationship between access to finance and international trade has received much attention in the recent years. This article reviews trade finance, its role and functioning. It discusses the relevance of the more general concept of access to credit for firms engaging in international trade both in normal times and during times credit may be scarcer because of a banking and financial crisis. Part of the paper focuses on the evidence from the recent episode of the Great Trade Collapse, and argues that the mixed empirical evidence is at least partially explained by the heterogeneous measurements of access to finance used in the empirical literature.

Keywords: International trade; Exports; Credit;

Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 2012

Number: 2012-054