Export Insurance Policy When Exporting to Lesser-Known Markets

Authors : Türkmen Göksel

Pages : 0-0

Doi:10.17233/se.54272

View : 15 | Download : 10

Publication Date : 2010-12-14

Article Type : Other

Abstract :There are crucial differences between exporting to a lesser-known market and exporting to a well-known market. I define a well-known (lesser-known) market if exporters have complete (incomplete) information about importers' characteristics such as contract viability. This risk premium between a well-known market and a lesser-known market causes lower export volume to lesser-known markets. I find that government-supported export insurance policies can increase the total volume of exports to lesser-known markets. Moreover, this paper argues that mostly medium-sized firms are getting benefits from this policy.
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