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Financial reforms and international trade:

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  • Chen, Xing
  • Munasib, Abdul
  • Roy, Devesh

Abstract

We provide evidence that financial reforms (over 1976–2005) significantly affected exports, in particular, of industries with higher external capital dependence and low asset tangibility. The coverage of reforms is comprehensive, encompassing the banking sector, interest rates, equity and international capital markets. Our methodology improves upon existing studies by controlling for time-varying unobserved exporter characteristics and unobserved country-specific industry characteristics. We find significant effects of various reforms with diverse impacts by intensity. Further, event studies that incorporate possible anticipated and lagged effects of commencement of reform policies confirm the findings.
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Suggested Citation

  • Chen, Xing & Munasib, Abdul & Roy, Devesh, 2012. "Financial reforms and international trade:," IFPRI discussion papers 1182, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:ifprid:1182
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    Keywords

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    JEL classification:

    • F1 - International Economics - - Trade
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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