The Export—Import Bank
An Economic Analysis
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The Export—Import Bank: An Economic Analysis provides a critical analysis of the export financing issue and the Eximbank's performance in fulfilling its congressional mandate. The analysis is based on extensive interviews with Eximbank officials and on numerous internal documents in addition to published materials. This book is composed of 11 chapters that reflect the three perspectives on Eximbank’s performance. First, an analysis of the need for such financing is presented in conjunction with an assessment of the competitiveness of U.S. programs compared with those provided by other nations. Second, Eximbank performance is evaluated in terms of the cost of its programs, their potential welfare impacts, and the likely impact on U.S. exports. Third, an evaluation is provided of the Eximbank's decision making and its methodology for evaluating the impact of its direct credit program. Recommendations are made concerning U.S. export financing objectives, strategies for achieving those objectives, and Eximbank administrative procedures. This work also provides an economic analysis of Eximbank financing and includes a case study of Eximbank decision making in the granting of a $200 million aircraft credit to Ansett Airlines of Australia. This book will prove useful to those who are interested in international trade and finance, as well as those concerned more broadly with government intervention in markets.
Table of Contents
Preface
1. Eximbank: The Controversy, Its Mandate, and Its Programs
I. The Controversy
II. The Origin and Functions of the Eximbank
III. The Principal Features of the Export-Import Bank Act of 1945
IV. Eximbank Programs
V. Related Organizations
VI. International Agreements Pertaining to Export Credits
VII. Policy Issues Associated with the Eximbank
References
2. A Review of the Bank's Activities: 1970-1981
I. Introduction
II. Eximbank Performance
III. PEFCO
IV. Conclusions
References
3. The Economic Justification for the Programs of the Eximbank
I. Introduction
II. Capital Market Imperfections
III. Capital Market Deficiencies
IV. Promotion of Exports, the Balance of Payments, and Employment
V. Maintaining U.S. Product Dominance
VI. Concessionary Export Financing as Aid
VII. Meeting Foreign-Subsidized Export Financing
VIII. Conclusions
References
4. The Supply and Demand for Government-Supported Export Financing
I. Introduction
II. The Demand for and Supply of Government Financing of International Trade
III. The Response to Challenges to the Eximbank
IV. Conclusions
References
5. The Competitiveness of Eximbank Programs
I. Introduction
II. Official Export Financing Programs of Six Major Trading Countries
III. The Level of Official Export Financing
IV. Analysis of the Disposition of Preliminary Commitments
V. Surveys of Exporters
VI. Conclusions
Appendix 5.A. The Export Financing Programs of Six Other Countries
References
6. The Subsidy Provided by Eximbank Financing
I. Introduction
II. Estimates of the Subsidy
III. The Subsidy Provided by an Eximbank Credit
IV. Estimation of the Subsidy
V. Analysis of the Direct Credit Data
VI. Conclusions
Appendix 6.A. Derivation of the Subsidy Provided by an Eximbank Credit and the Blended Interest Rate on a Credit
Appendix 6.B. Eximbank Country Risk Groups
References
7. The Welfare Consequences of Concessionary Export Financing
I. Introduction
II. The Nature of the Welfare Effects of Concessionary Export Financing
III. Estimates of the Net Cost of Eximbank Concessionary Financing
IV. Conclusions
Appendix 7.A. The Discount Elasticity of the Export Price
References
8. Additionality and Its Measurement
I. Introduction
II. The Treasury Study of FY1978 Eximbank-Supported Exports
III. The Eximbank Studies
IV. A Critique of the Additionality Studies
V. The Information Problem
VI. An Alternative Approach to the Measurement of Additionality
References
9. A Test of Additionality
I. Introduction
II. Additionality and Aircraft Financing
III. The Bank's Aircraft Financing Policy
IV. The FY1979-1981 Aircraft Credits
V. The Model and Hypotheses Tested
VI. Results
VII. Conclusions
VIII. An Extension of the Methodology to All FY1980-1981 Credits
Appendix 9.A. Aircraft Export Financing, FY1979
Appendix 9.B. Aircraft Export Financing, FY1980
Appendix 9.C. Aircraft Export Financing, FY1981
References
10. The Ansett Case
I. Introduction
II. The Aircraft Offers
III. The Airbus Financing Offer
IV. The Eximbank Board Meetings
V. Analysis of the Subsidy Provided by the Eximbank Financing
VI. Analysis of the Bank's Decision Making in the Ansett Case
VII. Implications for the Bank's Decision-Making Process
Appendix 10.A. Calculation of the U.S. Dollar Interest Rate Equivalent to the Airbus Financing Offer
Appendix 10.B. Calculation of the Subsidy on the 727 and 737 Financing
References
11. The Future Role of the Eximbank
I. Introduction
II. U.S. Objectives and the Eximbank
III. Achieving Export Financing Objectives
IV. The Operation of the Bank in Its Present Form
V. Conclusions
References
Index
Product details
- No. of pages: 356
- Language: English
- Copyright: © Academic Press 1983
- Published: January 28, 1983
- Imprint: Academic Press
- eBook ISBN: 9781483268538
About the Author
David P. Baron
About the Editor
Karl Shell
Affiliations and Expertise
Cornell University