Bank‐intermediated trade finance and the intensive margin of African trade

Bibliographic Data

ID21543071
AuthorsEugene Bempong Nyantakyi (0000-0001-5615-0444, African Development Bank Group, Microeconomics Institutional and Development Impact (ECMR.2) Abidjan Côte d'Ivoire, corresponding author)
Year2023
Volume46
Issue4
Pages1144-1160
Publication date2023-04-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueWorld Economy (JOURNAL)
Journal identifiersISSN: 0378-5920 • E-ISSN: 1467-9701
PublisherWiley (PUBLISHER • GB)
DOI10.1111/twec.13384
OpenAlexW4319789143
LanguageEN
References cited31

This paper presents evidence on the importance of bank‐intermediated trade finance for the intensive margin of African trade, using unique data from 43 African countries. It shows that African trade is underserved by banks. Banks intermediate about 40% of the region's trade – a far lower share than the global average of 80%. It finds that bank‐intermediated finance has a positive and significant effect on the intensive margin of African trade, even after accounting for the impact of domestic credit to the private sector. Estimates from standardised coefficients show that the impact of access to trade finance on trade volume for Africa is large and exceeds that of exchange rate volatility and trade logistics. These results suggest that policies aimed at promoting the region's trade should make access to bank‐intermediated finance a priority

Access to Finance · Bank credit · Economics · Financial system · International economics · International trade · Macroeconomics · Public finance · Trade barrier · Trade Credit · Trade finance · Corporate Finance and Governance · Global trade and economics · Working Capital and Financial Performance · Finance

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Open DOIOpen Access