Series: IMF Working Papers
Author(s): Jiandong Ju , and Shang-Jin Wei
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 01 June 2005
Keywords: External Finance, Factor Endowment, Financial Development, HOS model, Wooden Barrel, external capital, capital market, capital owners, Neoclassical Models of Trade, Financial Institutions and Services: General,
This paper develops a theory of international trade in which financial development and factor endowments jointly determine comparative advantage. We apply the financial contract model of Holmstrom and Tirole (1998)...