Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/96826
Authors: 
Bougheas, Spiros
Falvey, Rod
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 4775
Abstract: 
We introduce financial frictions into a simple two sector model of international trade with heterogeneous agents and investigate the impact of differences in the strength of financial institutions and wealth inequality on trade flows, capital movements and entrepreneurial migration. Distinct cost-cutting and career-changing motives for entrepreneurial migration exist, which can lead to two-way entrepreneurial flows. We establish presumptions that countries with stronger financial systems or greater wealth inequality will export the output of the financially dependent sector, will import capital and will be a (net) exporter of entrepreneurs. Important exceptions are shown.
Subjects: 
entrepreneurial migration
trade flows
capital flows
wealth inequality
financial frictions
JEL: 
F21
G15
Document Type: 
Working Paper

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