Financial System Architecture and the Patterns of International Trade
Amissah, E., Bougheas, S., Defever, F. 
ORCID: 0000-0001-6462-0522 & Falvey, R. (2021).
Financial System Architecture and the Patterns of International Trade.
European Economic Review, 136,
article number 103751.
doi: 10.1016/j.euroecorev.2021.103751
Abstract
Countries differ in the extent to which their financial systems rely on banks or on financial markets. We offer a model featuring a complex relationship between countries’ financial system architecture and their comparative advantage. Countries with capital markets that are relatively more efficient than their banking systems gain comparative advantage in sectors with strong dependence on market finance. Moreover, countries specialising in sectors that depend on market finance develop their capital markets more than their banking systems. To empirically investigate these links, we construct a measure of sector bank dependence and establish a bi-directional relationship between countries’ comparative advantage and their financial systems architecture.
| Publication Type: | Article |
|---|---|
| Additional Information: | © 2021. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/ |
| Publisher Keywords: | Financial Systems, Trade Patterns, Banks, Direct Finance |
| Subjects: | H Social Sciences > HG Finance J Political Science > JZ International relations |
| Departments: | School of Policy & Global Affairs > Economics |
| SWORD Depositor: |
Available under License Creative Commons Attribution Non-commercial No Derivatives.
Download (800kB) | Preview
Export
Downloads
Downloads per month over past year
Metadata
MetadataActions (login required)
Admin Login