Markets for risk and openness to trade: how are they related?
2002 (English)In: Journal of International Economics, ISSN 0022-1996, E-ISSN 1873-0353, 369-395 p.Article in journal (Refereed) Published
If protectionist trade policies aim to insure domestic industries against swings in world market prices, the development of financial markets could lead to trade liberalization. Likewise, trade liberalization could lead to the development of financial markets that help agents diversify the added risks. In this paper, we empirically address the hypothesis that there is a positive interdependence between financial development and liberal trade policies. We find a positive and economically significant relationship between the two, with causation running in both directions. The results are, however, somewhat dependent on the measure of trade policy being used.
Place, publisher, year, edition, pages
2002. 369-395 p.
Financial markets; Trade policy; Panel data
IdentifiersURN: urn:nbn:se:uu:diva-206089DOI: 10.1016/S0022-1996(01)00153-2OAI: oai:DiVA.org:uu-206089DiVA: diva2:643411