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Title: Factors Influencing the Credit Lending Volume of Thai Commercial Banks Granting to the International Trade Sector
Authors: Termtechatipong, Pongprayoon 
Issue Date: 1994
Publisher: University of the Thai Chamber of Commerce
Source: Pongprayoon Termtechatipong (1994) Factors Influencing the Credit Lending Volume of Thai Commercial Banks Granting to the International Trade Sector.
Abstract: International Trade plays an essential role in Thailand's national economy. In that it directly affects the country's balance of payment and trade. A country which exports more than it imports will have a surplus trade balance. Thus, if other element in the balance of payments statement remain unchanged, a more secure monetary and financial posture with regard to the public well-being and economic wealth. Quantitatively, this contributes a country's quality of life for it citizens. Thailand is one of the developing countries that is steadily moving towards becoming a newly industrialized country. The government has formulated an export-oriented policy rather than import-oriented one. This can be found from the increasing export trend in the past years.In addition,the government has set the export target on a increasing rate. Thus, by aggressively seeking further improvements in its balance of trade Thailand's citizens will enjoy a higher standard and scale of living. From the facts mentioned above, it is imperative that Thailand's private sectors engage in international trade, obtain cooperation and financial support from financial institutions in terms of short-term, medium-term and long-term fund so as to encourage their viability and competitiveness with other countries. Commercial banks are the financial institutions that play the most important role in encouraging import and export activities in the form of import and export credits and act as the medium for foreign exchange. Additionally, such banks also use the mechanism on matters of international trade since they represent the importer and exporter in trade interactions, including the usage of letters of credit opening for foreign suppliers or letters of credit obtained from foreign purchasers that place an order for products from Thai exporters. This type of commercial bank credit is of high value and is likely to increase. Because of its importance and profitability to banking institution. This study emphasizes the importance of credit extended to this economic sector, importers and exporters, by studying the factors considered by commercial bans as variables in extending letter of credit. The study is divided into two section; the first section analysis the relation between credit lending volume for imports in the form of trust receipt and various independent variable. The second section examines relation between credit and various independent variables. From the study, it found that there are various quantitative variables that expectedly have an influence on the importer and export credit volume. Therefore, econometric is used to form a complex regressive equation to determine those factors that influence the granting of such letters of credit openings. Ordinary Least Square Method is also used to establish the relationship between two types of credit lending volume and various independent variables,using Quarterly data from 1982-1992. The result of both equations shows that actors influence credit lending volume for import in the form of trust receipts, include national import value, trust receipt credit volume in the past quarter,lending volume from foreign financial institutions, lending volume from the bank of Thailand, lending volume from local financial institutions, and total deposits of commercial bank. The factors that have an influence on credit lending volume for export in the form of packing credit include credit volume for export in the past quarter, export value of the country, total deposits of commercial banks, and credit lending volume from the bank of Thailand. These variables are similarly related to the aforementioned ones.
Rights: This work is protected by copyright. Reproduction or distribution of the work in any format is prohibited without written permission of the copyright owner.
Appears in Collections:GS: Theses / Independent Studies

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