Comparative Advantage In Terms Research Articles

Comparative advantage in trade in financial services

The pattern of trade in financial services can be explained in terms of comparative advantage and distortions, similarly to trade in manufactures. This article examines international capital movements and property income as well as direct foreign investment in financial enterprises. The author shows that certain countries are responsible for bank lending abroad more or less in proportion to the size of their domestic economies whereas others specialise in international bank lending. JEL: G20, F30