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Financial reforms, product differentiation, and trade

Author

Listed:
  • Munasib, Abdul
  • Roy, Devesh

Abstract

We hypothesize that exports of differentiated products, which entail greater upfront costs, increase more as financial reforms take place. We find strong and robust empirical support of this hypothesis with a comprehensive set of measures of reforms encompassing the banking sector, interest rates, equity and international capital markets.

Suggested Citation

  • Munasib, Abdul & Roy, Devesh, 2014. "Financial reforms, product differentiation, and trade," Economics Letters, Elsevier, vol. 123(1), pages 37-41.
  • Handle: RePEc:eee:ecolet:v:123:y:2014:i:1:p:37-41 DOI: 10.1016/j.econlet.2014.01.006
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    References listed on IDEAS

    as
    1. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, pages 7-35.
    2. Abdul Abiad & Enrica Detragiache & Thierry Tressel, 2010. "A New Database of Financial Reforms," IMF Staff Papers, Palgrave Macmillan, vol. 57(2), pages 281-302, June.
    3. Fink, Carsten & Mattoo, Aaditya & Neagu, Ileana Cristina, 2005. "Assessing the impact of communication costs on international trade," Journal of International Economics, Elsevier, vol. 67(2), pages 428-445, December.
    4. Daniel Trefler, 2004. "The Long and Short of the Canada-U. S. Free Trade Agreement," American Economic Review, American Economic Association, vol. 94(4), pages 870-895, September.
    5. Alejandro Artopoulos & Daniel Friel & Juan Carlos Hallak, 2011. "Lifting the Domestic Veil: The Challenges of Exporting Differentiated Goods Across the Development Divide," NBER Working Papers 16947, National Bureau of Economic Research, Inc.
    6. Manova, Kalina, 2008. "Credit constraints, equity market liberalizations and international trade," Journal of International Economics, Elsevier, vol. 76(1), pages 33-47, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Product differentiation; Exporter–time fixed effects; Exporter–industry fixed effects; Exports;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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