Poultry in Motion: A Study of International Trade Finance Practices

By Pol Antrs, C. Fritz Foley, Matthew C. Johnson, J. Zeitler, K. Bagwell, Mihir A. Desai, Ricard Gil, James R. Hines, Kalina B. Manova, Samuel Kortum and 5 more. Journal of Political Economy, 2015

375 citations recorded by the source corpus.

This paper theoretically and empirically analyzes the financing terms that support international trade. The choice of trade finance terms balances the risk that an importer defaults on an exporter and the possibility that an exporter does not deliver goods as specified. Analysis of transaction-level data from a US exporter reveals that importers located in countries with weak enforcement of contracts typically finance transactions, but these firms are able to overcome the constraints of such environments if they can establish a relationship with the exporter. Furthermore, the manner in which trade is financed shapes the impact of crises.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/56ee4bc17e73ce40b3cb5e299895c6f72a20a9b6

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Citations in the corpus

Domestic Institutions as a Source of Comparative Advantage (2013, neutral): “This is discussed in Antràs and Foley (2011), Manova, Wei and Zhang (2011), and Shen (2012).”
Exporters, Importers and Credit Constraints (2015, positive): “Analyzing transaction-level data and the financing terms used by firms, Antràs and Foley (2015) show how trade finance, and hence financial constraints, influence the impact of macroeconomic and financial crises.”
Export Credit Guarantees and Export Performance: An Empirical Analysis for Germany (2013, neutral): “(1) (2) (3) (4) Hermes variable Per capita Dummy ln Guarantees ln Guarantees Coverage income group pos.”
How Firms Export: Processing vs. Ordinary Trade with Financial Frictions (2016, positive): “Our paper thus extends previous work on the use of trade credit in cross-border transactions (Antràs and Foley, 2015; Demir and Javorcik, 2014) and on the effect of financial frictions onmultinationals' decision to offshore intra-firm or at arm's length (Antràs et al., 2009; Manova et al., 2015;…”
Trade Credit, Relationship-specific Investment, and Product Market Power (2015, neutral): “Keywords: trade credit, relationship specific investment, vertically related industries, market power, incomplete contracts JEL Classification: G10, G30, G32 Electronic copy available at: http://ssrn.com/abstract=1659702”
The Value of Relationships: Evidence from a Supply Shock to Kenyan Rose Exports (2015, neutral): “As noted in footnote 12, the individual incentive compatibility constraints for the buyer (1) and for the seller (3) yield lower bounds to the value of the relationship for each party.”
Credit Market Disruptions and Liquidity Spillover Effects in the Supply Chain (2020, neutral): “McMillan and Woodruff (1999) and Antras and Foley (2015) show that relationship length is particularly important for trade credit decisions since it proxies for the importance of that customer in the firm’s future rent stream.”