Scandinavian Working Papers in Economics
Research Papers in Economics,
Stockholm University, Department of Economics
No 2002:6: Financial Markets, Industrial Specialization and Comparative Advantage - Evidence from OECD Countries
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, P. O. Box 6501, S-113 83 Stockholm, Sweden
Abstract: Due to underlying technological and organizational differences, industries differ
in their need for external finance. Since services provided by the financial sector
are largely immobile across countries, the pattern of industrial specialization
should be influenced by the degree of financial development. We find this effect
to be strong. In fact, the financial sector has greater impact on industrial
specialization among OECD countries than differences in human and physical
capital. We also show that the causality indeed run from the financial sector to
specialization. Further, financial sectors are a source of comparative advantage
in a way consistent with the Hecksher-Ohlin-Vanek model. Results on which
aspects of financial systems that are of importance for specialization and
comparative advantage are also presented.
Keywords: Financial intermediation; Financial systems; Specialization patterns; Financial intermediation; Financial systems; Specialization patterns; Comparative advantage
43 pages, June 13, 2002
Full text files
wp02_06.pdf
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