@techreport{7cf831e7e421477088ec4eb249ab09bc,
title = "Financial Globalization, Portfolio Diversification, and the Pattern of International Trade",
abstract = "The paper provides a general-equilibrium model where incomplete international financial markets lead to insufficient industrial specialization and low international trade. As international portfolio diversification is limited and productivity is uncertain, investors wish to maintain a diversified industrial structure rather than specializing according to their comparative advantage. Financial globalization then induces more specialization and more trade. The present framework yields explicit closed-form solutions for the volume and the structure of trade. Empirical results support the implications of the theory. Trade in financially open countries is (i) higher, (ii) more dependent on productivity differences, and (iii) less sensitive to industry risks",
keywords = "Balance of trade, Capital market, Comparative advantage, Consumption, Econometric models, Economics, Empirical Studies of Trade, Exports and Imports, Finance, Finance: General, Financial Aspects of Economic Integration, Financial markets, General Financial Markets: General (includes Measurement and Data), Industrial productivity, International capital markets, International economics, International Financial Markets, International trade, Investment Decisions, Macroeconomics, Macroeconomics: Consumption, Macroeconomics: Production, National accounts, Neoclassical Models of Trade, Portfolio Choice, Portfolio management, Production, Production and Operations Management, Productivity, Saving, Trade balance, United States, Wealth",
author = "Mikl{\'o}s Koren",
note = "{"}{"}Contents{"}{"}; {"}{"}I. INTRODUCTION{"}{"}; {"}{"}II. RELATED LITERATURE{"}{"}; {"}{"}III. THE MODEL{"}{"}; {"}{"}A. Production{"}{"}; {"}{"}B. Portfolio Choice{"}{"}; {"}{"}C. Asset Markets{"}{"}; {"}{"}IV. EMPIRICAL RESULTS{"}{"}; {"}{"}A. Implications of the Model{"}{"}; {"}{"}B. Data{"}{"}; {"}{"}C. Results{"}{"}; {"}{"}V. CONCLUSION{"}{"}; {"}{"}APPENDIX I. PROOF OF THEOREM 1{"}{"}; {"}{"}APPENDIX II. DATA APPENDIX{"}{"}; {"}{"}REFERENCES{"}{"} Description based upon print version of record",
year = "2003",
language = "English",
isbn = "1-4623-5974-4",
series = "IMF Working Papers",
publisher = "International Monetary Fund",
pages = "47",
type = "WorkingPaper",
institution = "International Monetary Fund",
}