Title: Determinants of risk sharing via exports: trade openness and specialisation

Authors: Faruk Balli; Eleonora Pierucci; Jian Gan

Addresses: School of Economics and Finance, Massey University, Albany Auckland, New Zealand ' Department of Economics, Roma Tre University, Via Silvio D'Amico 77, Roma, Italy ' School of Economics and Finance, Massey University, Albany Auckland, New Zealand

Abstract: Economic theory predicts that one of the main benefits of financial globalisation is the improvement of international risk sharing. In this paper, we provide an empirical evaluation of the determinants of risk sharing via exports. We conclude that risk sharing via exports is somehow important in emerging countries but not among OECD countries. More importantly, we find that trade openness and production/export specialisation generally have, with some exceptions, positive and statistically significant relationship with risk sharing. On the contrary, concentration on export destinations has been proved to be negatively correlated with risk sharing.

Keywords: risk sharing; production specialisation; export specialisation; trade openness; financial globalisation.

DOI: 10.1504/IJCEE.2020.10023093

International Journal of Computational Economics and Econometrics, 2020 Vol.10 No.4, pp.380 - 397

Accepted: 13 Apr 2019
Published online: 04 Aug 2020 *

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