| Author Name | YOSHIDA Yushi (Shiga University) / Kemal TÜRKCAN (Akdeniz University) / YOSHIMI Taiyo (Chuo University) |
|---|---|
| Creation Date/NO. | May 2022 22-E-051 |
| Research Project | Exchange Rates and International Currency |
| Download / Links |
Abstract
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.
Published: Yoshida, Yushi, Kemal Türkcan, and Taiyo Yoshimi, 2025. "Cash-in-advance payments and transaction size: Cash-constrained importers," Emerging Markets and Industrialized Countries in the New Wave of Globalization, (2025), 165–176.
https://link.springer.com/chapter/10.1007/978-3-032-04602-4_8
