This paper studies theoretically how the cross-country differences in the institutional quality (IQ) of domestic credit markets shape the patterns of international capital flows when such IQ differences also cause productivity differences across countries. IQ affects productivity by changing...

This paper presents a simple model of the world economy, in which productivity gains in manufacturing are responsible for the global trend of manufacturing decline, and yet, in a cross-section of countries, faster productivity gains in manufacturing do not necessarily imply faster declines in...

This paper offers two simple models to illustrate how corporate governance, contractual enforcement, and the balance sheet condition of the business sector etc., can affect the patterns of international trade and capital flows in the presence of credit market imperfections. (JEL: D52, F15, F21,...