| The relationship between financial development and openness of trade has always been the focus of attention. Economic globalization and regional economic integration has become an inundant tendency since 1980s. Almost all the countries in the world choose open-door policy to promote economic growth, and the linkage between economic activities such as production, trade, investment and finance becomes closer and closer as well. Under these circumstances, researches on the relationship between financial development and openness of trade become a new field with rapid development. The thesis discusses the effects of financial development on openness of trade. On a theoretic view, the research combines not only the sector of real economy and financial sector, but also the microeconomic sectors and macroeconomic sectors, which is a brand new research method. On a practical view, since openness is of great importance to economic development, taking Central and Eastern European countries (CEE countries) as samples has special meanings. CEE countries have undergone the transition from planned economy to market economy with a strong trend of openness and also a zigzag process. So the empirical test on relationship between financial development and openness of trade will be a reference for all the emerging economies including China which is still in the process of transition.There are 7 chapters in total, the basic structure are as follows:Introduction covers the theoretic and practical value of this thesis, research method and technical route, and also the main innovations and drawbacks.Chapter 1 is the review of the literature, which makes systematic sum-up and comment on relationship between financial development and international trade.Chapter 2 gives a detailed theoretical study on the relation between development and trade:(1) The functions of financial development and the facilitations of international trade. Financial development provides more facilities of external financing for trade during production period; provides facilities of settlement and financing together with risk aversion during the period of dealing. (2) Imperfect credit and international trade. Analysis of the change of welfare from a closed model to an open economy tells that the difference of financial development will influence the gain from trade. (3) The comparative advantage of financial development. We find that financial development has effects on the executive cost of contract, which in turn becomes the cause of trade. (4) Financial development and traditional comparative advantages. The conclusion is that with a "high-quality" institution, the difference of factor endowment decides the mode of trade; with a "low-quality" institution, the level of financial development decides the mode of trade.Chapter 3 analyzes the financial development in CEE countries. The writer firstly reviews the reform of financial sectors in these countries, and then concludes the characteristics of financial development in CEE countries. The bank-dominated financial system has a great improve in financial depth, scale, structure and efficiency.Chapter 4 analyzes the openness of trade in CEE countries. The writer firstly reviews the reform of trade sectors in these countries, and then induces the characteristics of the trade openness in CEE countries. CEE countries made reconstruction and privatization as well as effects to join international organizations. But the long-last trade deficit made it hard for trade development.Chapter 5 is the empirical test of the relationship between financial development and trade openness in CEE countries. The writer chooses 4 kinds of indexes of financial development in both macroeconomic and microeconomic aspects, which are M2/GDP, LLY/GDP (the ratio of liquid liabilities to GDP), Private Credit/GDP and Interest rate Spread. As for description of trade openness, the writer chooses 5 kinds of indexes including the scale of trade and the competitive advantages, which are exports/GDP, imports/GDP, trade balance/GDP, revealed comparative advantage index (RCA) and normalized trade balance index (NTB). After pooled test, the writer tested the robustness of empirical results.Chapter 6 is the whole conclusions of the dissertation and the writer's suggestion for the openness and development in China.The financial development in CEE countries hasn't promoted the development of trade, let alone being one of advantages of foreign trade. Indeed, the financial development in CEE countries even depressed the development of trade to some degrees. The patterns of economic development and opening-up should be the reasons.(1) Fictitious sectors (mainly the financial sectors) have been dominant factor of economy growth and development in transition, while sectors of both agriculture and industry are on the decrease. (2) Economic globalization, regional economic integration and opening policy pave the way for the growth of import, huge capital inflows resulting from financial liberalization realized the growth of imports in these countries. Though increase of both exports and imports every year, the growth rate of imports is always faster which results in a large sum of trade deficit. This leaves the trade structure unimproved and trade advantage unrealized.(3) Credit scale has been escalated in the past 15 years, but the credit fund including the inflow capital moved to consumption rather than production. From the theoretical view, financial development stimulates trade openness. However, our empirical test shows it is not the fact.All in all, the dissertation is a study of applying the updated theory of the relationship between financial development and international trade to the foreign economy development in CEE countries. After testing theoretical conclusion with the economic data in CEE countries, the writer finds the limitation of the present theory and problems of economic transition and the mode of foreign openness. However, due to lack of data of micro firms, the dissertation still needs further research.
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