Title: Financial development and international trade
Description: Economies with better developed financial sectors have a comparative advantage in manufacturing industries. A two-sector model shows the sector with large scale economies profiting more than the other from a well-developed financial sector. In countries with higher levels of financial development, manufactured exports represent a higher share of GDP and of merchandise exports, and those countries have a higher trade balance in manufactured goods.
Subjects: Comparative advantage (International trade), Econometric models, Economies of scale, Exports, Manufactures