products. We find that letters of credit and documentary collections cover about 10 percent of U.S. exports and are preferred … for larger transactions, indicating substantial fixed costs. Letters of credit are employed the most for exports to …

credit on U.S. exports. We show that a one-standard deviation negative shock to a country's supply of letters of credit … reduces U.S. exports to that country by 1.5 percentage points. This effect is stronger for smaller and poorer destinations. It …