Beck, Thorsten2014-08-262014-08-262001-05https://hdl.handle.net/10986/19656The author explores a possible link between financial development and trade in manufactures. His theoretical model focuses on the role of financial intermediaries in facilitating large-scale, high-return projects. Results show that economies with better developed financial sectors have a comparative advantage in manufacturing industries. He provides evidence for this hypothesis, first proposed by Kletzer and Bardhan (1987), using a 30-year panel of data for 65 countries. Controlling for country-specific effects and possible reverse causality, he shows that financial development exerts a large causal impact on the level of both exports and the trade balance of manufactured goods.en-USCC BY 3.0 IGOASYMMETRIC INFORMATIONAVERAGE COSTSCAPITAL STOCKCENTRAL BANKCENTRAL BANKSCLOSED ECONOMYCOMPARATIVE ADVANTAGECOMPETITIVE MARKETSCONSTANT RETURNSCONSTANT RETURNS TO SCALECONSUMERSCONSUMPTION FUNCTIONCONTRACT ENFORCEMENTCOUNTRY REGRESSIONSCOUNTRY-SPECIFIC EFFECTSCREDIT RATIONINGCURRENCYDEBTDEMAND CURVEDEMAND FUNCTIONSDEPOSITSDESCRIPTIVE STATISTICSDEVELOPMENT ECONOMICSDIFFERENTIAL PATHSDISTRIBUTION FUNCTIONDYNAMIC PANELECONOMETRIC MODELECONOMETRICSECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC HISTORIANSECONOMIC REVIEWECONOMIC STAGNATIONECONOMIC STUDIESECONOMIC THEORYECONOMIES OF SCALEEMPIRICAL EVIDENCEEMPIRICAL GROWTH LITERATUREEMPIRICAL LITERATUREEMPIRICAL TESTEMPLOYMENTENDOGENOUS VARIABLEEQUILIBRIUMEXOGENOUS VARIABLEEXPECTED RETURNEXPECTED VALUEEXPLANATORY VARIABLESEXPORT SHAREEXPORT SHARESEXPORTSEXTERNAL FINANCEFACTOR ENDOWMENTSFACTOR MARKETSFINANCIAL DEVELOPMENTFINANCIAL INSTITUTIONSFINANCIAL SECTORFINANCIAL SECTORSFINANCIAL SERVICESFINANCIAL SYSTEMSFOOD PRODUCTIONFOREIGN PRODUCERSGDPGROWTH PERFORMANCEGROWTH RATEHIGH CORRELATIONIMPORTSINCOMEINCOME LEVELINCREASING RETURNSINCREASING RETURNS TO SCALEINSURANCEINTEREST RATEINTERNATIONAL TRADELIQUIDITYLIQUIDITY CONSTRAINTSLONG-RUN EQUILIBRIUMLONG-RUN IMPACTMACROECONOMIC VARIABLESMACROECONOMICSMARGINAL COSTMARGINAL REVENUEMONETARY ECONOMICSMONOPOLISTIC COMPETITIONNATURAL RESOURCESNEGATIVE EFFECTNET EXPORTERS0 HYPOTHESISOPENNESSPOLICY IMPLICATIONSPOLICY MAKERSPOLICY RESEARCHPOLITICAL ECONOMYPOSITIVE IMPACTPRICE ELASTICITYPRIVATE SECTORPRODUCERSPRODUCT DIFFERENTIATIONPRODUCT MARKETSPRODUCTION FUNCTIONPRODUCTION TECHNOLOGYPRODUCTIVITYPRODUCTIVITY GROWTHPUBLIC POLICYREAL GDPREGRESSION RESULTSRELATIVE DEMANDRELATIVE SUPPLYRETURN ON EQUITYSAVINGSSERIAL CORRELATIONSIGNIFICANT CORRELATIONSPECIALIZATIONTERMS OF TRADETOTAL OUTPUTTRADE BALANCETRADE FLOWSTRADE PATTERNSTRADE REFORMSUTILITY FUNCTIONUTILITY FUNCTIONSWEALTH10.1596/1813-9450-2608