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The US Export-Import Bank Stimulates Exports

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  • Caroline

    (Peterson Institute for International Economics)

Abstract

One year after the US Export-Import Bank (EXIM) was reauthorized by Congress, the debate over its future continues to rage. EXIM, meanwhile, remains hampered by lack of a three-member quorum on its Board, preventing it from approving transactions over $10 million. Currently the five-member Board has only two serving directors. The main issue in the debate is whether the Bank, which provides financing and insurance for US businesses that want to export, substitutes for the private sector or whether--as its advocates argue--it helps US companies compete in markets where private financing opportunities are scarce. This Policy Brief analyses the relationship between historical EXIM financing and export volumes and shows that EXIM lending stimulates US exports. In fact, every dollar authorized by EXIM results in $1.35 in greater exports. EXIM is not a substitute for private finance but is additive, helping US companies to be competitive in foreign markets. The Bank expands US exports, reducing the trade deficit, and returns the profits from its business to the US Treasury. Over the period studied, 2007-14, EXIM transferred more than $4 billion to the Treasury.

Suggested Citation

  • Caroline, 2016. "The US Export-Import Bank Stimulates Exports," Policy Briefs PB16-23, Peterson Institute for International Economics.
    • Handle: RePEc:iie:pbrief:pb16-23
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    Cited by:

    1. Ben Jelili Riadh, 2020. "Do Default Loss Risks Matter for Arab Exports? Evidence from a Gravity Modelling Approach," Review of Middle East Economics and Finance, De Gruyter, vol. 16(3), pages 1-22, December.
    2. Child, John & Karmowska, Joanna & Shenkar, Oded, 2022. "The role of context in SME internationalization – A review," Journal of World Business, Elsevier, vol. 57(1).
    3. Agarwal, Natasha & Chan, Jackie M.L. & Lodefalk, Magnus & Tang, Aili & Tano, Sofia & Wang, Zheng, 2023. "Mitigating information frictions in trade: Evidence from export credit guarantees," Journal of International Economics, Elsevier, vol. 145(C).
    4. Ina C. Jäkel, 2021. "Export Credit Guarantees: Direct Effects on the Treated and Spillovers to their Suppliers," Economics Working Papers 2021-09, Department of Economics and Business Economics, Aarhus University.
    5. Martins, Florinda, 2017. "PV sector in the European Union countries – Clusters and efficiency," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 173-177.
    6. M. Scott Taylor, "undated". "Trade and the Environment: New Methods, Measurements, and Results NBER Working Paper No. 22636," Working Papers 2016-46, Department of Economics, University of Calgary, revised 01 Dec 2016.

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