Resiandini, Pramesti (2010): Financial development and trade: evidence from the world's three largest economies.
Download (133kB) | Preview
This paper examines the relationship between financial development and trade based on panel data of bilateral trade between the world's three largest economies (United States, Japan, and Germany) and 47 partner countries over the period 2003 to 2007. Access to loans for businesses has a strong positive relationship with bilateral trade. Access to the local equity market raises trade with less developed countries, but lowers trade with developed countries. The study also finds that international financial indicators are significant determinants of trade.
|Item Type:||MPRA Paper|
|Original Title:||Financial development and trade: evidence from the world's three largest economies.|
|Keywords:||Financial development; International trade flows; Gravity model|
|Subjects:||F - International Economics > F1 - Trade > F15 - Economic Integration
G - Financial Economics > G1 - General Financial Markets
F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade
|Depositing User:||Pramesti Resiandini|
|Date Deposited:||06. Oct 2010 14:45|
|Last Modified:||12. Mar 2015 08:19|
Anderson, James E. 1979. A theoretical foundation for the gravity equation. American Economic Review 69(1):106-116.
Anderson, James E. and Eric van Wincoop. 2003. Gravity with gravitas: a solution to the border puzzle. American Economic Review 93(1):170-92.
Baier, Scott L. and Jeffrey H. Bergstrand. 2007. Do free trade agreements actually increase members’ international trade? Journal of International Economics 71:72-95.
Baxter, Marianne and Michael A. Kouparitsas. 2006. What determines bilateral trade flows? NBER Working Paper 12188.
Beck, Thorsten. 2002. Financial development and international trade: is there a link? Journal of International Economics 57:107-131.
Beck, Thorsten. 2003. Financial dependence and international trade. Review of International Economics 11:296-316.
Calvallo, Eduardo A. and Jeffrey A. Frankel. 2008. Does openness to trade make countries more vulnerable to sudden stops, or less? Using gravity to establish causality. Journal of International Money and Finance 27:1430-1452.
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII). 2010. Geodesic distances database. http://www.cepii.fr/anglaisgraph/bdd/distances.htm
Clark, Peter, Natalia Tamirisa, and Shang-Jin Wei. 2004. Exchange rate volatility and trade flows – some new evidence, IMF Occasional Paper No.235. Washington: IMF.
Demirgüç-Kunt, Asli and Ross Levine. 2001. Financial structure and economic growth: perspectives and lessons. In Financial Structure and Economic Growth, ed. Asli Demirgüç-Kunt and Ross Levine. Cambridge, MA: The MIT Press.
Feenstra, Robert C. 2004. Advanced International Trade: Theory and Evidence. Princeton, NJ: Princeton University Press.
Frankel, Jeffrey A., and David Romer. 1999. Does trade cause growth? American Economic Review 89:379-99.
Freund, Caroline and Martha Denisse Pierola. 2008. Export surges: the power of a competitive currency. World Bank Policy Research Working Paper 450.
Gala, Paulo. 2008. Real exchange rate levels and economic development: theoretical analysis and econometric evidence. Cambridge Journal of Economics 32:273-288.
Goldsein, Itay and Assaf Razin. 2005. Foreign direct investment vs. foreign portfolio investment. NBER Working Paper 11047.
Gwartney, James and Robert Lawson. 2009. Economic Freedom Dataset, published in Economic Freedom of the World: 2009 Annual Report, Economic Freedom Network, http://www.freetheworld.com/2009/2009Dataset.xls.
Helpman, Elhanan. 1984. A simple theory of international trade with multinational corporations. Journal of Political Economy 92.
Helpman, Elhanan. 1987. Imperfect competition and international trade: evidence from fourteen industrial countries. Journal of the Japanese and International Economies 1:62-81.
Institutional Investor. 2003-2007. Country Credit Ratings September 2003-2007.
International Monetary Fund. 2008. Direction of Trade Statistics Online. http://www.imfstatistics.org/DOT/
International Monetary Fund. 2008. World Economic Outlook Database April 2008. http://www.imf.org/external/pubs/ft/weo/2008/01/weodata/index.aspx
International Monetary Fund. 2009. International Financial Statistics CD-ROM February 2009.
Levine, Ross, and Sara Zervos. 1998. Stock markets, banks, and economic growth. American Economic Review 88(3):537-558.
Levine, Ross, Norman Loayza, and Thorsten Beck. 2000. Financial intermediation and growth: causality and causes. Journal of Monetary Economics 46(1):31-88.
Markusen, James R. 1983. Factor movements and commodity trade as complements. Journal of International Economics 14.
McCallum, John. 1995. National borders matter: Canada-U.S. Regional trade patterns. American Economic Review 85(3):615-23.
McKinnon, Ronald I. 1993. The Order of Economic Liberalization: Financial Control in the Transition to a Market Economy, 2d ed., Baltimore, MD: The John Hopkins University Press.
Neary, Peter J. 1995. Factor mobility and international trade. Canadian Journal of Economics 28.
Neary, Peter J. 2002. Foreign direct investment and the single market. The Manchester School 70(3).
Neary, Peter J. 2009. Trade costs and foreign direct investment. International Review of Economics and Finance 18.
Ruffin, Roy J. and Farhad Rassekh. 1986. The role of foreign direct investment in U.S. capital outflows. American Economic Review 76(5).
Smith, Alasdair. 1987. Strategic investment, multinational corporations and trade policy. European Economic Review 31.
Tinbergen, Jan. 1962. Shaping the World Economy. New York: The Twentieth Century Fund.
World Economic Forum. 2003-2007. The Global Competitiveness Reports 2003-2007.
World Economic Forum. 2009. The Financial Development Report 2009.