Financial dependence and international trade

Thorsten Beck

No 2609, Policy Research Working Paper Series from The World Bank

Abstract: Does financial development translate into a comparative advantage in industries that use more external finance? The author uses industry-level data on firms'dependence on external finance for 36 industries and 56 countries to examine this question. The author shows that countries with better-developed financial systems have higher export shares and trade balances in industries that use more external finance. These results are robust to the use of alternative measures of external dependence and financial development and are not due to reverse causality or simultaneity bias.

Keywords: Economic Theory&Research; International Terrorism&Counterterrorism; Payment Systems&Infrastructure; Banks&Banking Reform; Environmental Economics&Policies; Economic Theory&Research; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Financial Economics; Environmental Economics&Policies; Banks&Banking Reform (search for similar items in EconPapers)
Date: 2001-05-01
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Citations: View citations in EconPapers (5)

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Journal Article: Financial Dependence and International Trade (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:2609

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