A study on the Activation of Trade Credit Insurance for e-Game Industry Exports

2011 ◽  
Vol 12 (4) ◽  
pp. 293-314
Author(s):  
유승균
Keyword(s):  
Trade Credit ◽  
Credit Insurance ◽  
Game Industry

Trade Credit Insurance

10.1596/27726 ◽  
2010 ◽  
Author(s):  
Peter M. Jones
Keyword(s):  
Trade Credit ◽  
Credit Insurance

scholarly journals The Evaluation of Trade Credit Insurance in Lithuanian Business Market as a Credit Risk Management Tool

2017 ◽  
Vol 14 (1) ◽  
pp. 5-20 ◽  
Author(s):  
Aleksandra Lezgovko ◽  
Andrej Jakovlev
Keyword(s):  
Risk Management ◽  
International Trade ◽  
Credit Risk ◽  
Trade Credit ◽  
Alternative Methods ◽  
Management Tool ◽  
Credit Risk Management ◽  
Management Tools ◽  
Credit Insurance ◽  
Business Market

AbstractIn today’s trade, the vast majority of commercial transactions in both domestic and international trade are concluded by applying trade credit terms. The aim of this article is to analyse the trade credit insurance and, according to the methodology, to evaluate it as a credit risk management tool in the context of Lithuanian business market. The authors have proposed a methodology that combines theoretical and practical research methods. First of all, with assistance of qualitative analysis, the alternative external credit risk management tools were examined. Such analysis allows not only to identify the advantages, disadvantages and benefits of researched risk management tools but also to assess the efficiency and rationality of trade credit insurance in the context of alternative methods. In order to carry out an assessment in the practical aspect, considering the lack of statistical data, it was decided additionally to perform an expert evaluation. After performing an assessment of trade credit insurance, it was concluded that in international trade, with a large buyer portfolio and high sales volume, the trade credit insurance becomes the most effective and rational way to manage credit risk, which eliminates the losses because of the debtor’s insolvency or bankruptcy, manages countries and sector’s risks and helps to discipline the debtor, what determines the decline in overdue accounts frequencies, amounts and volumes.

scholarly journals Trade credit insurance in a capital‐constrained supply chain

2020 ◽  
Vol 27 (5) ◽  
pp. 2340-2369 ◽  
Author(s):  
Hongping Li ◽  
Gongbing Bi ◽  
Xiaoyong Yuan ◽  
Dong Wang
Keyword(s):  
Supply Chain ◽  
Trade Credit ◽  
Credit Insurance

scholarly journals Trade Credit Insurance: Operational Value and Contract Choice

2020 ◽  
Author(s):  
S. Alex Yang ◽  
Nitin Bakshi ◽  
Christopher J. Chen
Keyword(s):  
Risk Management ◽  
Operations Management ◽  
Trade Credit ◽  
Strategic Interaction ◽  
Cash Flows ◽  
Management Tool ◽  
Monitoring Cost ◽  
Outside Option ◽  
Credit Insurance ◽  
Contract Choice

Trade credit insurance (TCI) is a risk management tool commonly used by suppliers to guarantee against payment default by credit buyers. TCI contracts can be either cancelable (the insurer has the discretion to cancel this guarantee during the insured period) or noncancelable (the terms cannot be renegotiated within the insured period). This paper identifies two roles of TCI: the (cash flow) smoothing role (smoothing the supplier’s cash flows) and the monitoring role (tracking the buyer’s continued creditworthiness after contracting, which enables the supplier to make efficient operational decisions regarding whether to ship goods to the credit buyer). We further explore which contracts better facilitate these two roles of TCI by modeling the strategic interaction between the insurer and the supplier. Noncancelable contracts rely on the deductible to implement both roles, which may result in a conflict: a high deductible inhibits the smoothing role, whereas a low deductible weakens the monitoring role. Under cancelable contracts, the insurer’s cancelation action ensures that the information acquired is reflected in the supplier’s shipping decision. Thus, the insurer has adequate incentives to perform its monitoring function without resorting to a high deductible. Despite this advantage, we find that the insurer may exercise the cancelation option too aggressively; this thereby restores a preference for noncancelable contracts, especially when the supplier’s outside option is unattractive and the insurer’s monitoring cost is low. Noncancelable contracts are also relatively more attractive when the acquired information is verifiable than when it is unverifiable. This paper was accepted by Vishal Gaur, operations management.

scholarly journals Trade Credit Insurance and Asymmetric Information Problem

2017 ◽  
Vol 64 (1) ◽  
pp. 123-137
Author(s):  
Olena Sokolovska
Keyword(s):  
Asymmetric Information ◽  
Trade Credit ◽  
Graphical Analysis ◽  
The Political ◽  
Insurance Markets ◽  
Credit Insurance ◽  
The World ◽  
Conceptual Background ◽  
Trade Credits ◽  
Information Problem

Abstract The presence of different risk factors in international trade gives evidence of the necessity of support in gaps that may affect exporters’ activity. To maximize the trade volumes and in the same time to minimize the exporters’ risks the stakeholders use trade credit insurance. The paper provides analysis of conceptual background of the trade credit insurance in the world. We analyzed briefly the problems, arising in insurance markets due to asymmetric information, such as adverse selection and moral hazard. Also we discuss the main stages of development of trade credit insurance in countries worldwide. Using comparative and graphical analysis we provide a brief evaluation of the dynamics of claims and recoveries for different forms of trade credit insurance. We found that the claims related to the commercial risk for medium and long trade credits in recent years exceed the recoveries, while with the political risk the reverse trend holds. And we originally consider these findings in terms of information asymmetry in the trade credit insurance differentiated by type of risk.

Insurance claims and audit quality: evidence from trade credit insurance in Chinese listed firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Songsheng Chen ◽  
Jun Guo ◽  
Yingying Tian ◽  
Lijuan Yan
Keyword(s):  
Audit Quality ◽  
Trade Credit ◽  
Audit Fees ◽  
Agency Cost ◽  
Insurance Claims ◽  
Content Type ◽  
Listed Firms ◽  
Credit Insurance ◽  
Audit Firms ◽  
Insurance Data

PurposeUsing unique trade credit insurance data from China, we examine whether trade insurance claims are associated with audit efforts and audit quality.Design/methodology/approachThe paper is based on a sample of Chinese firms to study insurance claims of trade credit insurance that affects abnormal audit fees.FindingsIn this study, we find that firms with high insurance claims pay higher abnormal audit fees. Further, our findings indicate that firms with high insurance claims have a short audit report lag and tend to select local audit firms.Originality/valueTo the best of our knowledge, this is the first study to investigate the association between trade credit insurance claims and audit efforts. In addition, we contribute to the literature on the agency cost of abnormal audit fees.

scholarly journals Can domestic trade credit insurance contracts be effective collateral for banks? A quantitative study of the Italian market

2019 ◽  
Vol 26 (13) ◽  
pp. 1239-1252
Author(s):  
Flavio Bazzana ◽  
Giacomo De Laurentis ◽  
Raoul Pisani ◽  
Renata Trinca Colonel
Keyword(s):  
Quantitative Study ◽  
Trade Credit ◽  
Insurance Contracts ◽  
Credit Insurance ◽  
Domestic Trade ◽  
Italian Market

scholarly journals Trade Credit Insurance and Asymmetric Information Problem

2017 ◽  
Vol 64 (1) ◽  
pp. 123-137 ◽  
Author(s):  
Olena Sokolovska
Keyword(s):  
Asymmetric Information ◽  
Trade Credit ◽  
Graphical Analysis ◽  
The Political ◽  
Insurance Markets ◽  
Credit Insurance ◽  
The World ◽  
Conceptual Background ◽  
Trade Credits ◽  
Information Problem

Abstract The presence of different risk factors in international trade gives evidence of the necessity of support in gaps that may affect exporters’ activity. To maximize the trade volumes and in the same time to minimize the exporters’ risks the stakeholders use trade credit insurance. The paper provides analysis of conceptual background of the trade credit insurance in the world. We analyzed briefly the problems, arising in insurance markets due to asymmetric information, such as adverse selection and moral hazard. Also we discuss the main stages of development of trade credit insurance in countries worldwide. Using comparative and graphical analysis we provide a brief evaluation of the dynamics of claims and recoveries for different forms of trade credit insurance. We found that the claims related to the commercial risk for medium and long trade credits in recent years exceed the recoveries, while with the political risk the reverse trend holds. And we originally consider these findings in terms of information asymmetry in the trade credit insurance differentiated by type of risk.

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