dynamics of financial integration and assesses whether advances in financial integration and globalization yield the beneficial … real effects resulting from a more efficient resource allocation predicted by theory. We find that: (a) financial … financial integration and globalization predict higher growth, lower growth volatility, as well as lower probabilities of …

represent a new channel that reduces common gains from globalization. Trade liberalization increases the borrowing rate, leads … increases the within-industry variance of, sales and reduces welfare gains as consumers dislike price heterogeneity. Our theory …