Do Export Credit Agencies Benefit the Economy?

In, Soh Young

Do Export Credit Agencies Benefit the Economy?

In, Soh Young. "Do Export Credit Agencies Benefit the Economy?" Stanford International Policy Review. Stanford University, September 2014

23 Pages Posted: 9 Nov 2015 Last revised: 30 Oct 2017

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Soh Young In

Korea Advanced Institute of Science & Technology (KAIST); Stanford University - School of Engineering

Date Written: September 24, 2014

Abstract

This study empirically evaluates the effectiveness of Export Credit Agencies (ECAs) on export and other key macroeconomic variables such as real GDP growth, employment, and domestic lending activities. Based on a panel data of 15 countries, which have established the official ECAs during 1972-2010, we use the differences-in-differences method for estimation by utilizing the staggering timing of ECA establishments in those countries. We find that: (1) having an ECA raises export, (2) this positive effect does not last in the long run, (3) this positive effect comes from direct export credit scheme, not from credit guarantee scheme, (4) ECA credit crowds out private lending in domestic financial markets, and (5) having an ECA is not associated with higher economic growth and employment.

Keywords: Export Credit Agency, ECA, direct loan, government guarantee, private sector, crowding-out, government intervention, economic growth

Suggested Citation: Suggested Citation

In, Soh Young, Do Export Credit Agencies Benefit the Economy? (September 24, 2014). In, Soh Young. "Do Export Credit Agencies Benefit the Economy?" Stanford International Policy Review. Stanford University, September 2014 , Available at SSRN: https://ssrn.com/abstract=2687601