Specialization in the presence of trade and financial openness

Jaap Bos; Claire Economidou; Lu Zhang

doi:10.1007/s00181-019-01652-1

Specialization in the presence of trade and financial openness

Jaap Bos, Claire Economidou, Lu Zhang^*

^*Corresponding author for this work

Finance

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

This paper sheds new light on the relationship between openness and industrial specialization. The roles of trade and financial openness, separately and in conjunction with each other, are unraveled to study specialization patterns for a panel of 30 countries for more than three decades. Results show that trade openness has a stronger association with industrial specialization in countries with a low degree of intra-industry trade, whereas financial openness has a stronger association with specialization in countries with more developed financial systems. Further, the effect of trade (financial) openness on specialization is enhanced by the level of financial (trade) openness.

Original language	English
Pages (from-to)	2783-2816
Number of pages	34
Journal	Empirical Economics
Volume	58
Issue number	6
Early online date	2019
DOIs	https://doi.org/10.1007/s00181-019-01652-1
Publication status	Published - Jun 2020

JEL classifications

g29 - Financial Institutions and Services: Other
f15 - Economic Integration
f14 - Empirical Studies of Trade
c23 - "Single Equation Models; Single Variables: Models with Panel Data; Longitudinal Data; Spatial Time Series"
l60 - Industry Studies: Manufacturing: General

Keywords

Financial openness
Manufacturing
Specialization
COUNTRIES
DIVERSIFICATION
GLOBALIZATION
RISK
BUSINESS-CYCLE SYNCHRONIZATION
INTEGRATION
MARKET INTERDEPENDENCE
GROWTH
LIBERALIZATION
Trade openness
SUDDEN STOPS

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Cite this

@article{1563571b479c4aebb315870e84313057,

title = "Specialization in the presence of trade and financial openness",

abstract = "This paper sheds new light on the relationship between openness and industrial specialization. The roles of trade and financial openness, separately and in conjunction with each other, are unraveled to study specialization patterns for a panel of 30 countries for more than three decades. Results show that trade openness has a stronger association with industrial specialization in countries with a low degree of intra-industry trade, whereas financial openness has a stronger association with specialization in countries with more developed financial systems. Further, the effect of trade (financial) openness on specialization is enhanced by the level of financial (trade) openness.",

keywords = "Financial openness, Manufacturing, Specialization, COUNTRIES, DIVERSIFICATION, GLOBALIZATION, RISK, BUSINESS-CYCLE SYNCHRONIZATION, INTEGRATION, MARKET INTERDEPENDENCE, GROWTH, LIBERALIZATION, Trade openness, SUDDEN STOPS",

author = "Jaap Bos and Claire Economidou and Lu Zhang",

note = "data source: industry-specific data from the EU KLEMS database, OECD structural analysis database (STAN) and the world input–output database (WIOD). ",

year = "2020",

month = jun,

doi = "10.1007/s00181-019-01652-1",

language = "English",

volume = "58",

pages = "2783--2816",

journal = "Empirical Economics",

issn = "0377-7332",

publisher = "Springer",

number = "6",

}

TY - JOUR

T1 - Specialization in the presence of trade and financial openness

AU - Bos, Jaap

AU - Economidou, Claire

AU - Zhang, Lu

N1 - data source: industry-specific data from the EU KLEMS database, OECD structural analysis database (STAN) and the world input–output database (WIOD).

PY - 2020/6

Y1 - 2020/6

N2 - This paper sheds new light on the relationship between openness and industrial specialization. The roles of trade and financial openness, separately and in conjunction with each other, are unraveled to study specialization patterns for a panel of 30 countries for more than three decades. Results show that trade openness has a stronger association with industrial specialization in countries with a low degree of intra-industry trade, whereas financial openness has a stronger association with specialization in countries with more developed financial systems. Further, the effect of trade (financial) openness on specialization is enhanced by the level of financial (trade) openness.

AB - This paper sheds new light on the relationship between openness and industrial specialization. The roles of trade and financial openness, separately and in conjunction with each other, are unraveled to study specialization patterns for a panel of 30 countries for more than three decades. Results show that trade openness has a stronger association with industrial specialization in countries with a low degree of intra-industry trade, whereas financial openness has a stronger association with specialization in countries with more developed financial systems. Further, the effect of trade (financial) openness on specialization is enhanced by the level of financial (trade) openness.

KW - Financial openness

KW - Manufacturing

KW - Specialization

KW - COUNTRIES

KW - DIVERSIFICATION

KW - GLOBALIZATION

KW - RISK

KW - BUSINESS-CYCLE SYNCHRONIZATION

KW - INTEGRATION

KW - MARKET INTERDEPENDENCE

KW - GROWTH

KW - LIBERALIZATION

KW - Trade openness

KW - SUDDEN STOPS

U2 - 10.1007/s00181-019-01652-1

DO - 10.1007/s00181-019-01652-1

M3 - Article

SN - 0377-7332

VL - 58

SP - 2783

EP - 2816

JO - Empirical Economics

JF - Empirical Economics

IS - 6

ER -

Specialization in the presence of trade and financial openness

Abstract

JEL classifications

Keywords

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