Scandinavian Working Papers in Economics
Working Papers,
Lund University, Department of Economics
No 2013:13: Finance, Comparative Advantage, and Resource Allocation
Melise Jaud (), Madina Kukenova () and Martin Strieborny ()
Additional contact information
Melise Jaud: Paris School of Economics and World Bank
Madina Kukenova: University of Lausanne
Martin Strieborny: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden
Abstract: 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.
Keywords: resource misallocation; …nance; comparative advantage; export survival
36 pages, April 22, 2013
Full text files
WP13_13.pdf
Questions (including download problems) about the papers in this series should be directed to Prakriti Thami ()
Report other problems with accessing this service to Sune Karlsson ().
This page generated on 2021-12-07 07:46:08.