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dc.titleBank Linkages and International Trade
dc.contributor.authorHale, Galina
dc.contributor.authorCandelaria, Christopher
dc.contributor.authorCaballero, Julián
dc.contributor.authorBorisov, Sergey
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.date.available2014-01-14T00:00:00
dc.date.issue2013-12-11T00:00:00
dc.description.abstractThis paper shows that bank linkages have a positive effect on international trade. A global banking network (GBN) is constructed at the bank level, using individual syndicated loan data from Loan Analytics for 1990-2007. Network distance between bank pairs is computed and aggregated to country pairs as a measure of bank linkages between countries. Data on bilateral trade from IMF DOTS are used as the subject of the analysis and data on bilateral bank lending from BIS locational data are used to control for financial integration and financial flows. Using a gravity approach to modeling trade with country-pair and year fixed effects, the paper finds that new connections between banks in a given country-pair lead to an increase in trade flow in the following year, even after controlling for the stock and flow of bank lending between the two countries. It is conjectured that the mechanism for this effect is that bank linkages reduce export risk, and four sets of results that support this conjecture are presented.
dc.format.extent42
dc.identifier.doihttp://dx.doi.org/10.18235/0011522
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Bank-Linkages-and-International-Trade.pdf
dc.language.isoen
dc.mediumAdobe PDF
dc.publisherInter-American Development Bank
dc.subjectIntegration and Trade
dc.subject.jelcodeF10 - Trade: General
dc.subject.jelcodeF15 - Economic Integration
dc.subject.jelcodeF34 - International Lending and Debt Problems
dc.subject.jelcodeF36 - Financial Aspects of Economic Integration
dc.typeWorking Papers
idb.identifier.pubnumberWorking Papers
idb.operationBK-A1467
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