Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Using annual data for 18 OECD countries over the period 1980-2004, we investigate how labour and financial factors interact to determine unemployment by estimating a dynamic panel model using the system generalized method of moments (GMM). We show that the impact of financial variables depends strongly on the labour market context. Increased market capitalization as well as decreased banking concentration reduce unemployment if the level of labour market regulation, union density and coordination in wage bargaining is low. The above financial variables have no effect otherwise. Increasing intermediated credit and banking concentration is beneficial for employment when the degree of labour market regulation, union density and coordination in wage bargaining is high. These results suggest that the respective virtues of ed and market-based finance are crucially tied to the labour market context. JEL-Code: E24, J23, P17. Terms of use: Documents in

The aim of this paper is to review the literature on the link between finance and international trade. First, export performance is shown to strongly depend on sectors' or firms' external finance dependence. More vulnerable firms or sectors export less than others. Moreover, insufficient financial development and financial crises harm exports to a greater extent when firms or sectors are dependent on external finance. Second, trade finance plays a key role in financing trade and provides a powerful transmission channel for financial shocks, which affect international trade to a greater extent than domestic activities. Moreover there is a reciprocal causality between trade and finance. Finally, financial reforms and trade liberalization appear to be complementary, indicating that trade openness reforms are more effective in promoting GDP growth when financial systems are well developed.

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Using a gravity model on a data set of 69 developed and developing countries over the period 1986–2006, we show that the trade‐promoting role of financial intermediation in the exporting country is mitigated when this country faces low exporting costs, that is when there is a regional trade agreement (RTA) between this country and the importing one. We also establish that this mitigating effect is reduced in financially constrained sectors, for which the role of financial intermediation remains crucial. Finally, we find evidence that the same trade‐boosting effect and the same interaction with RTAs prevail for financial intermediation in the importing country.