Template-Type: ReDIF-Paper 1.0
Author-Name: Ricardo Correa
Author-X-Name-First: Ricardo
Author-X-Name-Last: Correa
Author-Name: Andrea Fabiani
Author-X-Name-First: Andrea
Author-X-Name-Last: Fabiani
Author-Name: Matias Ossandon Busch
Author-X-Name-First: Matias
Author-X-Name-Last: Ossandon Busch
Author-Name: Miguel Sarmiento
Author-X-Name-First: Miguel
Author-X-Name-Last: Sarmiento
Title: The ripple effect: supply chain reconfigurations and cross-border credit dynamics
Abstract: We study the role that cross-border firm-to-firm credit plays in financing exporters. Exploiting the exogenous shock of US tariffs on Chinese goods in 2018–2019, we examine the response of Colombian firms – bystanders not targeted by trade policy – to redirected US demand. Using credit registry information for cross-border and domestic non-financial firm financing, we find that almost 40 percent of the total credit sourced by exporters came from cross-border firm-to-firm credit at end-2019, which represented 80 percent of their cross-border credit. In contrast to traditional trade credit, which is typically short-term, firm-to-firm credit has an average maturity of almost 2 years, and has characteristics resembling bank lending. Our findings highlight an overlooked financial channel underpinning the international trade network.
Creation-Date: 2025-12
File-URL: https://www.bis.org/publ/work1315.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work1315.htm
File-Format: text/html
Number: 1315
Keywords: trade disruptions, cross-border credit, firm-to-firm credit, global value chains
Classification-JEL: G21, F34, F42
Handle: RePEc:bis:biswps:1315