Document Type : Research Paper
Authors
Abstract
Based on the literature on the relationship between financial development and trade, this paper examines the effect of financial development on both trade and trade in services in acceded countries to the WTO. By using a panel data method for the period of 1985 to 2006, the results indicate that financial development has a positive effect on total trade in acceded countries; therefore, it shows that financial development is a determinant factor of trade development and policy in these countries. On the other hand, financial development has a negative effect on trade in services.
Keywords
Arestis, P. and P. Demeriades (1997), Financial Development and Economic Growth: Assessing the Evidence, the Economic Journal, May 1997, 107.
Beck, Thorsten (2002), Financial Development and International Trade. Is There a Link?, Journal of International Economics, June 2002, 57(1).
Beck, Thorsten (2003), Financial Dependence and International Trade, Review of International Economics, 11.
Beck, T., Demirgüc-Kunt, A., & Levine, R (2000), A new database on financial development and structure, Policy Research Paper No. 2147. Washington, D.C.: World Bank.
Becker, bo and David Greenberg (2005), Financial Development and International Trade, world bank.
Hur, Jung; Manoj Raj and Yohanes E. Riyanto (2006), Finance and Trade: A Cross-Country Empirical Analysis on the Impact of Financial Development and Asset Tangibility on International Trade, World Development Vol. 34, No. 10.
Kim, Dong-Hyeon; Shu-Chin Lin and Yu-Bo Suen (2010), Are Financial Development and Trade Openness Complements or Substitutes?, Southern Economic Journal, January.
King, R. And R. Levine (1993), Finance and Growth: Schumpeter Might be Right, the Quarterly Journal of Economics, August.
Kletzer, Kenneth, and Pranab Bardhan (1987), Credit Markets and Patterns of International Trade, Journal of Development Economics, 27.
Levine, R (1997), Financial Development and Economic Growth: Views and Agenda, Journal of Economic Literature, June.
Svaleryd, H. and Vlachos, J (2002), Markets for Risk and Openness to Trade: How are They Related, Journal of International Economics, 57.
Svaleryd, Helena, and Jonas Vlachos (2005), Financial Markets, the Pattern of Industrial Specialization and Comparative Advantage: Evidence from OECD Countries, European Economic Review, 49.
Unctad secretariat (2004), Trade in Services and Development Implication, Trade and Development Board, Commission on Trade in Goods and Services, and Commodities, Eighth session Geneva, 9–13 February 2004.
Unctad secretariat (2007), Trade and Development Implications of Financial Services, Trade and Development Board, Commission on Trade in Goods and Services, and Commodities, Geneva, 20–21 February 2007.
World Development Indicators (2008), the World Bank.
)