Scandinavian Working Papers in Economics

Research Papers in Economics,
Stockholm University, Department of Economics

No 2000:11: Does Financial Development Lead to Trade Liberalization?

Helena Svaleryd and Jonas Vlachos ()
Additional contact information
Helena Svaleryd: Dept. of Economics, Stockholm University, Postal: Department of Economics, Stockholm University, S-106 91 Stockholm, Sweden
Jonas Vlachos: Department of Economics, Stockholm School of Economics, Postal: Department of Economics, Stockholm School of Economics, Box 6501, S-113 83 Stockholm, Sweden

Abstract: It has long been argued that trade restrictions can be motivated by insurance considerations in the absence of full risk diversification. Recent theoretical research suggests that markets for risk can alleviate resistance to reform and protectionist lobby group pressure. We empirically address the hypothesis that institutions reducing risk can facilitate liberal trade policy. Our results reveal a robust positive relationship between openness to trade and the development of domestic and international financial markets.

Keywords: Financial markets; Trade policy; Panel data

JEL-codes: F13; G20

35 pages, September 10, 2000

Full text files

wp00_11.pdf PDF-file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to Sten Nyberg ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-01-23 23:38:21.