CIRJE-F-293. Matsuyama, Kiminori, "Credit Market Imperfections and Patterns of International Trade and Capital Flows", August 2004.

In a world where credit relationships are subject to a variety of agency problems, corporate governance, contractual enforcement, and the balance sheet condition of the business sector are among many factors that can play an important role in the allocation of resources. This paper offers two simple models to illustrate how these factors can affect the patterns of international trade and capital flows in the presence of credit market imperfections.