Public Export Credit Insurance in the Netherlands: An Input-Output Approach

Abstract

This study assesses the contribution of the Dutch public export credit insurance facility (ECIF) to Dutch GDP and employment. Unlike previous studies, which generally adopt the gravity model of trade, we adopt an input-output approach. The results show that the contribution of economic activity insured by the public ECIF to GDP averages 0.24 percent annually. This concerns value added generated both by exporters and their domestic suppliers in the value chain. The contribution to employment shows an average of 0.27 percent, accumulating to 95,000 jobs (FTE) over 5 years. The estimated contribution of the public ECIF to the Dutch economy should be considered an upper boundary of its true contribution. Therefore, we examine the extent to which the above economic gains would be realized if the facility was unavailable using highly disaggregated trade data. The basic idea is that if certain products are only exported to certain destinations with the aid of the public ECIF, then this suggests 100 percent additionality. The inconclusiveness of our results underlines the difficulties in assessing the degree of additionality.