SSE/EFI Working Paper Series in Economics and Finance
Financial Markets, the Pattern of Specialization and Comparative Advantage. Evidence from OECD countries.
() and Helena Svaleryd
Abstract: Due to underlying technological differences, industries
differ in their need for external finance. Since the services provided by
the financial sector are largely immobile across countries, the pattern of
specialization should be influenced by the degree of financial development.
We find that this effect is strong: The financial sector has an even
greater impact on the pattern of specialization among OECD countries than
do differences in human- and physical capital. Further, it gives rise to
comparative advantage in a way consistent with the Hecksher-Ohlin-Vanek
model. Results on which aspects of financial systems that matter for
specialization are also presented.
Keywords: Financial intermediation; Financial systems; Specialization patterns; Comparative advantage; (follow links to similar papers)
JEL-Codes: F14; G20; O16; (follow links to similar papers)
39 pages, May 30, 2001, Revised November 8, 2001
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