NO CREDIT, NO GAIN: TRADE LIBERALIZATION DYNAMICS, PRODUCTION INPUTS, AND FINANCIAL DEVELOPMENT

• 成果类型: Article
• 署名作者: Kohn, David; Leibovici, Fernando; Szkup, Michal
• 署名单位: Pontificia Universidad Catolica de Chile; Federal Reserve System - USA; Federal Reserve Bank - St. Louis; University of British Columbia
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12620
• 发表日期: 2023
• 页码: 809-836
• 关键词: growth; constraints; frictions; losses; export

摘要

We study the role of financial development on the aggregate implications of reducing import tariffs on capital and intermediate inputs. We document empirically that financially underdeveloped economies feature a slower aggregate response following trade liberalization. To quantify these effects, we set up a general equilibrium model with heterogeneous firms subject to collateral constraints and estimate it using Colombian plant-level data. We find that low financial development substantially limited the gains from trade liberalization in Colombia in the early 1990s. More broadly, we find that low financial development substantially limits both the aggregate and welfare gains from tariff reductions.