Cash-In-Advance Payments and Transaction Size: Cash-Constrained Importers

Yoshida Y., TÜRKCAN K., Yoshimi T.

French-Japanese Conference on Asian and International Economies in the Era of Globalization, FJC 2024, Aix-en-Provence, Fransa, 20 - 21 Eylül 2024, ss.165-176, (Tam Metin Bildiri) identifier

  • Yayın Türü: Bildiri / Tam Metin Bildiri
  • Doi Numarası: 10.1007/978-3-032-04602-4_8
  • Basıldığı Şehir: Aix-en-Provence
  • Basıldığı Ülke: Fransa
  • Sayfa Sayıları: ss.165-176
  • Anahtar Kelimeler: Cash constraint, Cash-in-advance, F14 (Empirical Studies of Trade), L14 (Transactional Relationships), Payment method; Productivity
  • Akdeniz Üniversitesi Adresli: Evet

Özet

A high-productivity exporter can be in a stronger position when facing an importer in determining how and when payment is made. With a lower risk associated with exporters, cash-in-advance (CIA) payment is preferred by exporters. However, a baseline probit regression for the Turkish export dataset at the transaction level could not find a positive relationship between exporters’ productivity and CIA. This puzzling finding is reconciled when we consider the financial conditions of importers, which may not allow their payment in advance, especially for a large-cash transaction. We find that the transaction size discourages the use of CIA payments. We also find that the productivity of exporters is associated non-linearly, i.e., in an inverted-U shape, with the use of CIA payments.