Time to Ship During Financial Crises

38 Pages Posted: 3 Aug 2012 Last revised: 7 Dec 2024

See all articles by Nicolas Berman

Nicolas Berman

Graduate Institute of International and Development Studies (IHEID)

Jose De Sousa

University of Paris Panthéon-Assas; SciencesPo - LIEPP - Laboratory for Interdisciplinary Evaluation of Public Policies

Phillipe Martin

Institut d'Etudes Politiques de Paris (Sciences Po)

Thierry Mayer

Institut d'Etudes Politiques de Paris (Sciences Po)

Multiple version iconThere are 2 versions of this paper

Date Written: August 2012

Abstract

We show that the negative impact of financial crises on trade is magnified for destinations with longer time-to-ship. A simple model where exporters react to an increase in the probability of default of importers by increasing their export price and decreasing their export volumes to destinations in crisis is consistent with this empirical finding. For longer shipping time, those effects are indeed magnified as the probability of default increases as time passes. Some exporters also decide to stop exporting to the crisis destination, the more so the longer time-to-ship. Using aggregate data from 1950 to 2009, we find that this magnification effect is robust to alternative specifications, samples and inclusion of additional controls, including distance. The firm level predictions are also broadly consistent with French exporter data from 1995 to 2005.

Suggested Citation

Berman, Nicolas and De Sousa, Jose and Martin, Phillipe and Mayer, Thierry, Time to Ship During Financial Crises (August 2012). NBER Working Paper No. w18274, Available at SSRN: https://ssrn.com/abstract=2123013

Nicolas Berman (Contact Author)

Graduate Institute of International and Development Studies (IHEID) ( email )

PO Box 136
Geneva, CH-1211
Switzerland

Jose De Sousa

University of Paris Panthéon-Assas ( email )

4 rue Blaise Desgoffe
Paris, 75006
France

HOME PAGE: http://lemma.u-paris2.fr/

SciencesPo - LIEPP - Laboratory for Interdisciplinary Evaluation of Public Policies ( email )

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Paris
France

Phillipe Martin

Institut d'Etudes Politiques de Paris (Sciences Po) ( email )

27, rue Saint-Guillaume
Paris, 75007
France

Thierry Mayer

Institut d'Etudes Politiques de Paris (Sciences Po) ( email )

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