The effect of accreditations on export: The example of Aegean Region

Foreign trade is the export and import movements between countries. The delivery and payment of the goods sold as a result of the foreign trade relations of the countries and the resulting effects have gained great importance for the companies engaged in international trade. Countries has the forms of delivery and payment they used when they make foreign trade. One of these payment methods, letter of credit, is the most reliable payment method and the payment method that protects the rights of both parties. The letter of credit is an assurance that payment will be made after the fulfillment of certain conditions for the payment of the goods for export. The study aims at how effective and important payment of letter of credit in Aegean Region exports is among all other payment methods. In this context, the export amounts between 2011-2018 were analyzed according to the payment methods of the countries taken from Aegean Exporters' Associations. Letters of credit are compared with other payment methods and their advantages and usability are evaluated. 13 countries in the data received from the Aegean Exporters' Association the at export use of all forms of payment and from Turkey's top exporting countries were selected. Although it is the most reliable payment method, it is concluded that the letter of credit is not used much in the export of Aegean Region due to its cost, and the most used payment method has been the payment against goods. Although the use of letter of credit is different from country to country, it is also seen in the data that is used less commonly. Keywords: Foreign Trade, Export, Payment Methods and Letter of Credit