Finance, Comparative Advantage, and Resource Allocation

Arbeitspapier

We show that exported products exit the US market sooner if they violate the Heckscher-Ohlin notion of comparative advantage. Crucially, this pattern is stronger when exporting country has a well-developed banking system, measured by a high ratio of bank credit over the GDP. Banks thus push firms away from exports that are facing an uphill battle on a competitive foreign market due to a suboptimal use of the domestic factor endowment. Our results imply a disciplining role for bank credit in terminating inefficient trade flows. This constitutes a new channel through which finance improves resource allocation in the real economy.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: FIW Working Paper ; No. 130

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Neoclassical Models of Trade ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Corporate Finance and Governance: General ; Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
• Thema: resource misallocation ; finance ; comparative advantage ; export survival

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Jaud, Melise ; Kukenova, Madina ; Strieborny, Martin
• Ereignis: Veröffentlichung
• (wer): FIW - Research Centre International Economics
• (wo): Vienna
• (wann): 2014

Weitere Informationen

• Handle: http://hdl.handle.net/10419/121137
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ