Financial Development & Commercial Advantage
Global Economy Journal, 2017, vol. 17, issue 1, 10
The article seeks to clarify the relationship between financial development and the marginal variation in the proportion of exporting firms (extensive margin) and the volume exported by each economic sector (intensive margin). We develop a theoretical model with two countries facing different levels of financial restrictions and input costs, several sectors differentiated by their dependence on external finance and heterogeneous firms producing with a combination of inputs. The model shows that financially developed countries experience a commercial advantage in financially dependent sectors and countries with more competitive cost structures experience an advantage and specialize in low financially dependent sectors. This relationship is true even within the manufacturing sectors. The model also indicates that financial development only affects trade in financially constrained sectors.
Keywords: international trade; specialization; commercial advantage; financial development; heterogeneous firms; theoretical model (search for similar items in EconPapers)
JEL-codes: F12 G20 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
https://www.degruyter.com/view/j/gej.2017.17.issue ... -0027.xml?format=INT (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.
Journal Article: Financial Development & Commercial Advantage (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bpj:glecon:v:17:y:2017:i:1:p:10:n:3
Ordering information: This journal article can be ordered from
Access Statistics for this article
Global Economy Journal is currently edited by Jannett Highfill
More articles in Global Economy Journal from De Gruyter
Bibliographic data for series maintained by Peter Golla ().