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Financial Markets, the Pattern of Specialization and Comparative Advantage. Evidence from OECD countries

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Author Info
Vlachos, Jonas () (Dept. of Economics, Stockholm School of Economics)
Svaleryd, Helena (Department of Economics)

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Abstract

Due to underlying technological differences, industries differ in their need for external finance. Since the services provided by the financial sector are largely immobile across countries, the pattern of specialization should be influenced by the degree of financial development. We find that this effect is strong: The financial sector has an even greater impact on the pattern of specialization among OECD countries than do differences in human- and physical capital. Further, it gives rise to comparative advantage in a way consistent with the Hecksher-Ohlin-Vanek model. Results on which aspects of financial systems that matter for specialization are also presented.

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Publisher Info
Paper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 449.

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Length: 39 pages
Date of creation: 30 May 2001
Date of revision: 03 Sep 2001
Handle: RePEc:hhs:hastef:0449

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Related research
Keywords: Financial intermediation; Financial systems; Specialization patterns; Comparative advantage;

Other versions of this item:

Find related papers by JEL classification:
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
G20 - Financial Economics - - Financial Institutions and Services - - - General
O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment

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References listed on IDEAS
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Forssbæck , Jens & Oxelheim, Lars, 2008. "Financial Determinants of Foreign Direct Investment," Working Paper Series 741, Research Institute of Industrial Economics. [Downloadable!]
  2. Luigi Guiso & Tullio Jappelli & Mario Padula & Marco Pagano, 2004. "Financial Market Integration and Economic Growth in the EU," CSEF Working Papers 118, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy. [Downloadable!]
    Other versions:
  3. Raymond Fisman & Inessa Love, 2003. "Financial Dependence and Growth Revisited," NBER Working Papers 9582, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Johannes Moenius & Daniel Berkowitz, 2004. "Institutional Change and Product Composition: Does the Initial Quality of Institutions Matter?," William Davidson Institute Working Papers Series 2004-662, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  5. Cláudio Ribeiro de Lucinda, 2003. "International Trade in Manufactures and Finance," Anais do XXXI Encontro Nacional de Economia [Proceedings of the 31th Brazilian Economics Meeting] c39, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
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