Export - Import Bank (Ex-Im Bank) - Explained
What is an Export - Import Bank?
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Table of ContentsWhat is the Ex-Im Bank?What does the Export-Import Bank Do?Academic Research on Import-Export Bank
What is the Ex-Im Bank?
The Export-Import Bank of United States (Ex-Im Bank) is the official US bank specialized as an export credit agency (ECA). An ECA is an official entity established with the aim to financially assist companies in the USA that want to do business in emerging markets. Specifically, an ECA helps companies export to other countries by providing loans, guarantees, insurance, and other credit facilities.
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What does the Export-Import Bank Do?
The Ex-Im Bank was established in 1934 by Congress. It is a public body operated under a congressional charter. Its performance is periodically reviewed by congress. Globally, there are around 96 Export Credit Agency (ECA) which promotes export of their home countries.
The main purpose behind establishing the Ex-Im Bank was to increase exports of US goods to other countries around the world and to support job creation through exports. Unlike other agencies, which operate at taxpayer cost, the Ex-Im Bank is a self-sustaining federal body. It follows comprehensive and prudent risk management practices.
The Ex-Im Bank accepts both commercial or political risk associated with business in other countries. It is willing to accept political (war, terrorism, riots and revolution etc.) and commercial risk associated with doing business in foreign country.
The Export-Import Bank (Ex-Im Bank) acts as an agent on behalf of American exporters. It provides a working capital, export assistance, and guarantees of letter of credit (LOC) issued by foreign buyers.
Academic Research on Import-Export Bank
- The newbanksin town: Chinese finance in LatinAmerica, Gallagher, K. P., Irwin, A., & Koleski, K. (2012). upwards of $75 billion to Latin American countries. Chinas loan commitments of $37 billion in 2010 were more than those of the World Bank, Inter-American Development Bank, and United States Export-Import Bank combined for that year. After providing estimates of Chinese finance, we also examine the common claims that Chinese loans to Latin America have more favorable terms, impose no policy conditions, and have less stringent environmental guidelines than the loans of international financial institutions (IFIs) and Western governments. We find that: China Development Bank (CDB) loans carry more stringent terms than World Bank loans. The Export-Import Bank of China (China Ex-Im Bank), by contrast, generally offers lower interest rates than the US Ex-Im Bankthough this difference stems from the fact that the World Bank offers concessional interest rates as a form of aid, while China offers concessional rates not through CDB but rather through China Ex-Im. Chinese banks provide financing to a significantly different set of countries than the IFIs and Western banks,
- The new imperialism: The extraterritorial application ofUnited Stateslaw, Grundman, V. R. (1980). The new imperialism: The extraterritorial application of United States law.The International Lawyer, 257-266.
- The tenuous hold of China Inc. in Africa, Gill, B., & Reilly, J. (2007). Washington Quarterly,30(3), 37-52. This paper examines past, present, and future relationship of China in with African nations. Emphasis is placed on the development of infrastructure in African nations.
- An examination of barriers to exporting encountered by small manufacturing companies, Rabino, S. (1980). Management International Review, 67-73. The study concentrates on perceptions of small exporting firms in high-technology industries.
- Foreign direct investment and development, Moran, T. (1998). The White House and the world, 121.
- ShouldEx-Im Bankbe Retired?, Niskanen, W. A. (2001). The Ex-Im Bank in the 21st Century: A New Approach. Washington: Institute for International Economics. In this paper, the author provides an in-depth assessment of the Ex-Im Bank based on the financing and promotion of US exports. It aims to show how well this Bank has completed its major tasks, and analyses concerns arising from various individuals relating to the retirement of the Ex-Im bank.
- Industrial policy is not the major reason for Japan's success, Trezise, P. H. (1983). The Brookings Review,1(3), 13-18. This paper proposes an opposing view to the belief that the reason for Japans success is due to their microeconomic industrial success.
- Projecting debt servicing capacity of developing countries, Feder, G., Just, R., & Ross, K. (1981). Journal of Financial and Quantitative Analysis,16(5), 651-669. This study shows the importance of foreign capital in the process of economic development using analysis of the growth record of many economies. It also explores the investment forms in developing countries, where foreign investments are given in forms of loans rather than grants.
- Ex-Im, exports, and private capital: Will financial markets squeeze thebank,, Cline, W. R. (2001).The Ex-Im Bank in the 21st century: A new approach, 102.
- Export supply and import demand models for the Turkish economy, Aydn, M. F., plak, U., & Ycel, M. E. (2004). The Central Bank of the Republic of Turkey Research Department Working Paper,4(09). This study estimates the export supply and import demand for the Turkish economy using both single equation and vector autoregression frameworks. It analyses the long run and short-run specifications of exports and imports estimated using the least squares estimators and a conventional set of explanatory variables. The analysis reveals the real exchange rate as a significant determinant of imports and the trade deficit, but not of exports.
- Does manufacturing matter?, Hersh, A., & Weller, C. (2003).Challenge,46(2), 59-79.
- The relationship between export promotion spending andstateexportsin theUS, Wilkinson, T. J., Keillor, B. D., & d'Amico, M. (2005). Journal of Global Marketing,18(3-4), 95-114. This paper explores the importance of exporting on the economy of a firm, industry, and a nation at large. It empirically considers the relationship between export promotion spending and export activity. The results support the notion that U.S. state government spending on export promotion results in increased export. It goes on to show the impact of these findings on investors and entrepreneur, and on the US economy.