We develop a two-country overlapping-generations model with domestic financial frictions and show that cross-country differences in financial development explain three recent patterns of international capital flows. In our model, domestic financial frictions distort the interest rates and production efficiency in the less financially developed country. Capital flows not only lead to cross-count...

there has been no research so far conducted on the financial participation of the private sector in iran’s industrial development during the last three decades. the present research has been carried out through documentary, survey and field methods. the participants were a sample of 146 private firm owners. previous studies have indicated that during the first decade after the islamic revolutio...