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Trade finance and trade collapse during the Global Financial Crisis : Evidence from the Republic of Korea

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  • Trade finance and trade collapse during the Global Financial Crisis
  • Song, E. Young
  • Korea Institute for International Economic Policy


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Title Trade finance and trade collapse during the Global Financial Crisis
Similar Titles
Sub Title

Evidence from the Republic of Korea

Material Type Articles
Author(English)

Song, E. Young

Publisher

Sejong:Korea Institute for International Economic Policy

Date 2014-12
Journal Title; Vol./Issue Journal of East Asian Economic Integration:vol. 18(no. 4)
Pages 29
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Trade
Holding KIEP

Abstract

This study examines the role of trade finance in the trade collapse of 2008-09 from the perspective of the Korean economy. We use two approaches. Firstly, as background to a more formal analysis, we make a casual observation on the behavior of aggregate data on trade finance, on which Korea has relatively abundant data. Aggregate data do not convincingly support the view that trade finance played an active role in causing the trade collapse. The measures of trade finance and the value of trade both dropped sharply, but the ratio of trade finance over trade was stable and in some cases increased during the crisis period. Secondly, using quarterly data on listed firms in Korea, we conduct panel estimations to test whether firms that are more dependent on external finance experienced greater export contraction during the crisis. (The rest omitted)