Foreign Banks and Trade : Bridging the Information Gap?
Foreign banks can play an important role in facilitating international trade. Most research has focused on the financing role banks can play, but less is known about the information role. This paper estimates a gravity model using sub-regional data...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/758541487079872870/Foreign-banks-and-trade-bridging-the-information-gap http://hdl.handle.net/10986/26134 |
| Summary: | Foreign banks can play an important role
in facilitating international trade. Most research has
focused on the financing role banks can play, but less is
known about the information role. This paper estimates a
gravity model using sub-regional data from Turkey between
2002 and 2010 to explore whether foreign banks promote trade
through the information channel. The presence of a foreign
banks from a trade partner promote the exports of the
sub-region. In addition, the analysis finds that the
footprint of these foreign banks matters more for exports
than the presence of these banks and the level of financial
development of the sub-region. Banks from countries
neighboring trade partners can also decrease exports. When
taking into account financial conditions and examining the
differential impacts during the recent financial crisis, the
analysis finds that the footprint of foreign banks has the
largest impact on trade. |
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