Spillovers from export credit guarantees

Abstract Most countries use export credit agencies (ECAs) to mitigate export‐related credit constraints. Only few firms benefit directly from these credit schemes. In this paper, I analyze potential spillover effects from export credit guarantees to other firms. Using firm‐level data from the Danish ECA and exploiting detailed firm‐product‐level production and purchase statistics, I derive new measures for horizontal and backward spillovers at the firm‐product and firm levels. Results show that potential suppliers upstream increase their sales of those products that are purchased by the firm(s) receiving export credit guarantees. Moreover, employment and total sales of potential suppliers increase as well. These findings speak to the transmission of large export shocks (here reflected in the issuance of export credit guarantees) to other domestic firms via customer‐supplier linkages. In contrast, I find little evidence of negative effects on domestic producers when export credit guarantees are given to their competitors.