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Specialization in the presence of trade and financial openness

Author

Listed:
  • Jaap W. B. Bos

    (Maastricht University)

  • Claire Economidou

    (University of Piraeus)

  • Lu Zhang

    (CPB Netherlands Bureau for Economic Policy Analysis)

Abstract

This paper sheds new light on the relationship between openness and industrial specialization. The roles of trade and financial openness, separately and in conjunction with each other, are unraveled to study specialization patterns for a panel of 30 countries for more than three decades. Results show that trade openness has a stronger association with industrial specialization in countries with a low degree of intra-industry trade, whereas financial openness has a stronger association with specialization in countries with more developed financial systems. Further, the effect of trade (financial) openness on specialization is enhanced by the level of financial (trade) openness.

Suggested Citation

  • Jaap W. B. Bos & Claire Economidou & Lu Zhang, 2020. "Specialization in the presence of trade and financial openness," Empirical Economics, Springer, vol. 58(6), pages 2783-2816, June.
    • Handle: RePEc:spr:empeco:v:58:y:2020:i:6:d:10.1007_s00181-019-01652-1
    DOI: 10.1007/s00181-019-01652-1
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    More about this item

    Keywords

    Specialization; Trade openness; Financial openness; Manufacturing;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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