Description: Financial Dependence and International Trade

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Financial Dependence and International Trade

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 que...

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Bibliographic Details
Main Author:	Beck, Thorsten
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ACCOUNTING ADVERSE SELECTION ALTERNATIVE INSTRUMENTS BALANCE SHEETS BEARING LIABILITIES CAPITAL EXPENDITURES CAPITAL MARKET CAPITAL MARKETS CASH FLOWS CENTRAL BANK COAL COMMERCIAL BANKS COMPARATIVE ADVANTAGE CONSUMERS CONTRACT ENFORCEMENT CREDIT MARKET CREDIT RATIONING CREDITOR RIGHTS CURRENCY DEMAND SHOCKS DEVELOPMENT ECONOMICS DISCOUNTED VALUE DOMESTIC INDUSTRIES ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMISTS ELASTICITIES ELASTICITY ELASTICITY OF SUPPLY ENTREPRENEURSHIP EQUILIBRIUM EQUITY MARKET EXCHANGE RATE EXCHANGE RATE POLICY EXPENDITURES EXPORT INDUSTRIES EXPORT SHARE EXPORT SHARES EXPORTS EXTERNAL FINANCE EXTERNAL FINANCING FACTOR ENDOWMENTS FINANCIAL DEPENDENCE FINANCIAL DEVELOPMENT FINANCIAL DEVELOPMENT ACROSS COUNTRIES FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIARY DEVELOPMENT FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL STRUCTURE FINANCIAL SYSTEM FINANCIAL SYSTEMS GDP GDP PER CAPITA HUMAN CAPITAL IMPORT TARIFFS IMPORTS INCOME STATEMENTS INDUSTRY TRADE INSURANCE INTERNATIONAL TRADE LABOR PRODUCTIVITY LESS DEVELOPED COUNTRIES LIQUID LIABILITIES LIQUIDITY MARGINAL COSTS MARKET CAPITALIZATION MARKET DEVELOPMENT MARKET IMPERFECTIONS MARKET POWER MONETARY ECONOMICS MONOPOLIES MORAL HAZARD NET EXPORTERS PER CAPITA INCOME POLICY MAKERS PRIVATE CREDIT PRIVATE FIRMS PRIVATE SECTOR PRODUCERS REAL GDP REAL SECTOR REGRESSION ANALYSIS RETURN ON CAPITAL SAVINGS SPECIALIZATION STOCK MARKET STOCK MARKETS SUPPLY CURVE TARIFF BARRIERS TRADE BALANCE TRADE DATA TRADE DEFICIT TRADE FLOWS TRADE MODELS TRADE PATTERNS TRADE POLICY TRADE REFORMS TRADE STRUCTURE
Online Access:	http://documents.worldbank.org/curated/en/2001/05/2873608/financial-dependence-international-trade http://hdl.handle.net/10986/19634

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Summary:	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.