Logo
Munich Personal RePEc Archive

Asymmetric Effects of Financial Development on South-South and South-North Trade: Panel Data Evidence from Emerging Markets

Demir, Firat and Dahi, Omar S. (2009): Asymmetric Effects of Financial Development on South-South and South-North Trade: Panel Data Evidence from Emerging Markets.

[thumbnail of MPRA_paper_19177.pdf]
Preview
PDF
MPRA_paper_19177.pdf

Download (163kB) | Preview

Abstract

Using bilateral trade data in total and technology-and-skill-intensive manufactured goods for 28 developing countries that account for 82% of all developing country manufactures exports between 1978 and 2005, this paper explores the effects of financial development on the pattern of specialization in South-South and South-North trade. The empirical results using dynamic panel regressions and comprehensive sensitivity tests suggest that financial development in the South has an economically and statistically significant positive effect on the share of total and technology-and-skill-intensive manufactures exports in GDP, and total exports in South-South trade. In contrast, no such significant or robust effect of financial development is found in South-North trade. Overall, the positive effect of financial development is found to be asymmetric favoring South-South significantly more than South-North trade. In addition, financial development is found to be increasing technology-and-skill-intensive manufactured goods exports significantly more than total manufactured or merchandise goods exports.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.