Kukenova, MadinaJaud, MeliseStrieborny, Martin2014-09-022014-09-022012-06https://hdl.handle.net/10986/19930The authors show that exported products exit the US market sooner if they violate the Heckscher-Ohlin notion of comparative advantage. Crucially, this pattern is stronger when exporting country has a well-developed banking system, measured by a high ratio of bank credit over the GDP. Banks thus push firms away from exports that are facing an uphill battle on a competitive foreign market due to a suboptimal use of the domestic factor endowment. The results imply a disciplining role for bank credit in terminating inefficient trade flows. This constitutes a new channel through which finance improves resource allocation in the real economy.en-USCC BY 3.0 IGOALLOCATION OF CAPITALBANK CREDITBANK CREDITSBANK LENDINGBANKING SECTORBANKING SYSTEMBANKRUPTCYBANKRUPTCY PROCEDUREBANKSBILATERAL TRADEBONDSBUSINESS CYCLECAPITAL EXPENDITURESCAPITAL MARKETCAPITALIZATIONCASH FLOWCHECKSCOMMERCECOMPARATIVE ADVANTAGECOMPETITIVE PRODUCTCOMPETITIVE PRODUCTSCORPORATE BONDSCORPORATE FINANCECORPORATE GOVERNANCECREDIT CONSTRAINTSDEBTDEBT SERVICEDEBT SERVICE PAYMENTSDEPENDENT VARIABLEDEVELOPED COUNTRIESDEVELOPING COUNTRIESDEVELOPMENT ECONOMICSDEVELOPMENT POLICYDOMESTIC BANKDOMESTIC BANKINGDUMMY VARIABLEECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC REVIEWECONOMIC STUDIESECONOMIC SYSTEMSEMPIRICAL ANALYSISEMPIRICAL EVIDENCEEMPIRICAL RESULTSEMPLOYMENTEQUAL WEIGHTSEQUALIZATIONEXPENDITURESEXPLANATORY VARIABLESEXPORT GROWTHEXPORT PERFORMANCEEXPORT SHARESEXPORTEREXPORTERSEXPORTSEXTERNAL DEBTFACTOR ENDOWMENTSFACTOR PRICEFACTOR PRICESFINANCIAL DEVELOPMENTFINANCIAL MARKETSFOREIGN COMPETITIONFOREIGN MARKETFOREIGN MARKETSGDPGDP PER CAPITAGOVERNMENT INTERVENTIONGOVERNMENT INTERVENTIONSGOVERNMENT SUBSIDIESGROWTH THEORYHIGH CORRELATIONHUMAN CAPITALINTERNATIONAL BANKINTERNATIONAL ECONOMICSINTERNATIONAL TRADEINVENTORYLEGAL SYSTEMLIQUIDITYLONG-TERM RESOURCEMARGINAL PRODUCTSMARKET IMPERFECTIONSMARKETINGMEMBER COUNTRIESMINORITY INVESTORSNATIONAL BANK OF BELGIUMNEGATIVE IMPACTNEGATIVE SIGN0 HYPOTHESISPOLICY DISCUSSIONSPOLICY IMPLICATIONSPOLICY RESEARCHPOSITIVE IMPACTPRESENT VALUEPRIVATE CREDITPRIVATE SECTORPRODUCT MARKETPRODUCT MARKETSPUBLIC RELATIONSRATES OF RETURNSRESOURCE ALLOCATIONSHAREHOLDERSSKEWED DISTRIBUTIONSTOCK MARKETSTOCK MARKET CAPITALIZATIONSTOCK MARKETSSUBSTITUTETOTAL FACTOR PRODUCTIVITYTRADE FLOWSTRADE LIBERALIZATIONTRADINGVALUE ADDEDWAGESWORLD MARKET10.1596/1813-9450-6111