This section relies on a dataset on green-field FDI projects into 17 Arab countries assembled from a unique type of online database developed by FDI Intelligence, a specialist division of the Financial Times, which monitors cross border investments in new projects and expansions of existing ventures, covering all sectors and countries worldwide in 2020.
The major advantage of the data source used with respect to UNCTAD data is the availability of a sectoral classification for each investment project. The data includes estimated values on capital investment and the number of jobs created in cases where information was not available at project announcement.
Abstract: Limitations on the availability of timely and affordable trade financing, including export credit guarantee, are contributing to modest trade growth during the last five years, therefore it must be a matter of priority to improve our understanding of the linkages between financing/risk mitigation and trade activity, ensuring adequate levels of the former, to help fuel growth of the latter.
The existing research works on the effects of export credit insurance on export promotion mostly are concentrated around several European countries. Yet nothing is known about the influence of export credit guarantees on exports in the Arab region, where the structure of export industries and key trading partners significantly differ from other regions. The purpose of this paper is to bridge this gap by investigating empirically the significance of the relationship between exports and credit-worthiness of importing countries, using Arab merchandise export values. Corroborating evidence for such relationship gives support to the usefulness of specialized export financial institutions to finance exports, mitigate credit risk and keep trade finance markets in Arab countries from drying up. A dynamic panel approach is adopted to estimate an adjusted gravity model. The empirical results, based on a balanced panel of 107 Arab partner countries (importer countries) observed between 1997 and 2017, provide a strong and robust justification to the role of export credit insurance and guarantees in promoting merchandise exports in the Arab region.
Author: Riadh Ben Jelili