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Financial development and trade: evidence from the world's three largest economies

  • Resiandini, Pramesti

This paper examines the relationship between financial development and trade based on panel data of bilateral trade between the world's three largest economies (United States, Japan, and Germany) and 47 partner countries over the period 2003 to 2007. Access to loans for businesses has a strong positive relationship with bilateral trade. Access to the local equity market raises trade with less developed countries, but lowers trade with developed countries. The study also finds that international financial indicators are significant determinants of trade.

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File URL: http://mpra.ub.uni-muenchen.de/25631/1/MPRA_paper_25631.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 25631.

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Date of creation: 03 Oct 2010
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Handle: RePEc:pra:mprapa:25631
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  1. Ross Levine & Norman Loayza & Thorsten Beck, 2002. "Financial Intermediation and Growth: Causality and Causes," Central Banking, Analysis, and Economic Policies Book Series, in: Leonardo Hernández & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Se (ed.), Banking, Financial Integration, and International Crises, edition 1, volume 3, chapter 2, pages 031-084 Central Bank of Chile.
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  19. Helpman, Elhanan, 1984. "A Simple Theory of International Trade with Multinational Corporations," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 451-71, June.
  20. Marianne Baxter & Michael Kouparitsas, 2005. "What determines bilateral trade flows?," Working Paper Series WP-05-11, Federal Reserve Bank of Chicago.
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