Estimados Académicos y Académicas FEN,

Les extendemos la invitación al seminario que organiza el Departamento de Economía, en el que se presentará el trabajo titulado "Domestic credit, trade finance, and the trade tensions of 2016-18: A prelude to International fragmentation?".

Expone: Paula Margaretic, Profesora asistente, Escuela de negocios, UAI.

Coautor: David Moreno

Abstract: This paper exploits the exogenous changes of destination/origin-specific trade uncertainty indexes to investigate the impact of trade uncertainty on banks’ credit provision and firms’ foreign trade performance. Using transaction-level data of Chilean firms and banks, we show that increases in trade uncertainty induce a bank-firm portfolio reallocation away from non-trade firms toward firms involved in the global value chain (GVC) and importers who trade with countries exhibiting increasing trade uncertainty. However, bank credit to exporters does not increase when trade uncertainty augments, presumably because banks perceive them as riskier (compared to GVC firms and importers). Our findings are consistent with the working capital channel, where increasing trade uncertainty in foreign markets negatively affects Chilean firms’ working capital, and leads to a reduction in exports financed with cash-in-advance and trade credit. In contrast, imports grow more under periods of trade uncertainty when they are financed with cash in-advance or bank credit. The latter indicates that Chilean firms and banks provide finance to foreign firms exposed to increasing trade uncertainty in their own countries. 

El formato será presencial y el seminario se desarrollará en la Sala P-304.

Saludos cordiales,

Dirección de Investigación