Growth and risk: A view from international trade*

• 成果类型: Article
• 署名作者: Krishna, Pravin; Levchenko, Andrei A.; Ma, Lin; Maloney, William F.
• 署名单位: Johns Hopkins University; National Bureau of Economic Research; University of Michigan System; University of Michigan; Centre for Economic Policy Research - UK; Singapore Management University; The World Bank; Universidad de los Andes (Colombia)
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2023.103755
• 发表日期: 2023
• 关键词: product quality; financial development; RISK

摘要

This paper studies the cross-country patterns of risky innovation and growth through the lens of international trade. We use a simple theoretical framework of risky quality upgrading by firms under varying levels of financial development to derive two predictions. First, the mean rate of quality growth and the corresponding cross-sectional variance of quality growth in a country are positively correlated. Second, both the mean and variance of quality changes are positively correlated with the country's level of financial development. We then test these two hypotheses using data on disaggregated (HS10) bilateral exports to the United States. The patterns in the data are consistent with the theory. The mean and the variance of quality growth are strongly positively correlated with each other. Countries with greater finan-cial depth are systematically characterized by higher mean and higher variance in the growth of product quality. Our findings suggest a mean-variance trade-off in product quality improve-ments along the development path. Increases in financial depth do not imply lower variability of changes in the product space. (c) 2023 Elsevier B.V. All rights reserved.