In this study, I re-investigate the hypothesis that countries with a higher degree of financial integration will have a comparative advantage in the exports of those industries that rely more on external financing. For that research purpose, I apply the difference-in-difference approach pioneered by Rajan and Zingales (1998) to a cross-country cross-industry dataset. The outcome of this research shows that, over the 1989-2004 period, financial integration benefits the exports of those industries that rely more on external finance. More specifically, the results of the OLS estimation indicate that there exists a difference in the gains in terms of the export share lying in a range from 7.1% to 11.1% between the industry at the 75th percentile and the 25th percentile of external finance in a country with a degree of financial integration at the 75th percentile compared with a country at the 25th percentile. This finding is robust to a series of sensitivity analyses. Furthermore, this study also shows that the impact of financial integration on the exports of industries with different degrees of external financial reliance may depend on a country’s stage of economic development and the quality of its economic and political institutions.
