"Cash-in-advance Payments and Transaction Size: Cash-constrained importers", RIETI Discussion Paper Series 22-E-051

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Yoshida Y., Türkcan K., Yoshimi T.

Diğer, ss.1-12, 2022

  • Yayın Türü: Diğer Yayınlar / Diğer
  • Basım Tarihi: 2022
  • Sayfa Sayıları: ss.1-12
  • Açık Arşiv Koleksiyonu: AVESİS Açık Erişim Koleksiyonu
  • Akdeniz Üniversitesi Adresli: Evet

Özet

A high-productivity exporter can gain a stronger position over an importer in determining how and

when payment is made. With the lower risk associated with exporters, cash-in-advance (CIA) payment

is their preferred method of payment. However, a baseline probit regression for the Turkish export

dataset at the transaction level did 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 for advance payment, especially for a large cash transaction. We find that increasing

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.