Research

PUBLICATIONS

US Monetary Policy Spillovers To Emerging Markets: The Trade Credit Channel

with Maéva Silvestrini

Journal of International Economics (2025)

This paper provides empirical evidence on the impact of US monetary policy surprises on firm-to-firm trade credit in emerging markets, using a proprietary firm-level database. We show that trade credit acts as a buffer against the adverse effects of US monetary tightening, which, by constraining global financial conditions, increases reliance on trade credit as an alternative financing source. This effect is more pronounced for buyers with poor credit quality, who are primarily affected when financial conditions tighten. This later effect only exists in pre-existing relationships, where trust can be more readily established, compared to new partnerships. Given the widespread use of trade credit in emerging markets, this buffering role is crucial for mitigating financial pressures in these economies.

Replication Package

SUERF Policy Brief (WP version)

WORKING PAPERS

Cross-Sector Interactions in Western Europe: Lessons From Trade Credit Data

Working Paper

Large-scale analyses to map interactions between financial health at the sectoral level are still scarce. To fill the gap, in this paper, I map a network of predictive relationships across the financial health of several sectors. I provide a new advanced indicator to track propagation of financial distress across industries and countries on a monthly basis. I use defaults on trade credit as a measure of firms’ worsening financial conditions in a sector. To control for omitted variable bias, I apply a high-dimensional VAR analysis, and isolate direct cross-sector causalities à la Granger from common exposure to macroeconomic shocks or to third sector shock. I show that monitoring some key sectors – among which construction, wholesale and retail, or the automotive sector – can improve the detection of financial distress in other sectors. Finally, I find that those financial predictive relationships correlates with the input-output structure in the considered economies. Such structure of financial interactions reflect the propagation of financial distress along the supply chain, between suppliers and their buyers.

Trade Networks and Natural Disasters: Diversion, not Destruction

With Timothée Gigout.

JRC Working Paper

We study how international trade networks react to natural disasters. We combine exhaustive firm-to-firm trade credit and disaster data and use a dynamic difference-in-differences identification strategy. We establish the causal effect of natural disasters abroad on the size, shape and credit quality of French exporters’ international trade networks. We find evidence of large and persistent disruptions to international buyer-supplier relationships. This leads to a restructuring of the trade network of the largest French exporters and a change in trade finance sources for affected countries. We find strong and permanent negative effects on the trade credit sales of French suppliers to affected destinations. The largest firms are driving the response, both on the supplier and buyer side. Trade network restructuring towards unaffected destinations is higher for large multinationals trading more homogeneous products. This effect operates exclusively through a reduction in the number of buyers. This induces a negative shift in the distribution of the credit quality of buyers in the destination affected by the natural disaster.

ONGOING RESEARCH

Natural Disasters and Firms’ Global Value Chain Adaptation - with Andrea Ciani, Filippo Maria D’Arcangelo & Elena Zaurino

Sustainable Finance in MENA countries - Book chapter with Lucia Alessi, Annette Becker & Caterina Rho

Firms in transition: a different capital structure? - with Giacomo Cotignano & Serena Fatica

The financial drivers of innovation - with Giacomo Cotignano & Serena Fatica

POLICY REPORTS

Towards a framework to monitor finance for green investment with Annette Becker, Serena Fatica, Roberto Panzica and Georgios Papadopoulos.