Open Economies Review

, Volume 20, Issue 4, pp 545–563 | Cite as

Exporting against Risk? Theory and Evidence from Public Export Insurance Schemes in OECD Countries

  • Ernst Baltensperger
  • Nils Herger
Research Article


This paper endeavours to find out in how far public export insurance schemes foster international trade. Thereto, a gravity equation is derived, which accounts for the risk of financial losses in case firms contract defaulting foreign buyers. Empirical results suggest that OECD countries issuing trade credits with generous state-guarantees did not, during the 1999 to 2005 period, witness more exports towards politically and commercially more unstable low-income countries. Rather, publicly indemnified trade finance has promoted exports, to a modest degree, towards high and middle-income countries, where financial intermediaries and markets provide viable alternatives to hedge against payment risks.


Export credit insurance Export promotion Default risk Gravity equation 

JEL Classification




This paper has benefited from valuable comments and suggestions by seminar participants at the WTI in Berne, Susan Kaplan, and a thoughtful referee. Financial support of the Ecoscientia and the Swiss National Science Foundation is acknowledged with thanks. The usual disclaimer applies.


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Copyright information

© Springer Science+Business Media, LLC 2007

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of BerneBerneSwitzerland

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