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Redirecting International Trade: Contracts, Conflicts, and Institutions

Author

Listed:
  • Kokko Ari

    (Copenhagen Business School, Department of International Economics and Management, Porcelaenshaven 24B, 2000 Fredriksberg, Danmark)

  • Söderlund Bengt

    (Stockholm School of Economics and The Ratio Institute, Box 3203, Sveavägen 59, 103 64 Stockholm, Sweden)

  • Tingvall Patrik Gustavsson

    (The Ratio Institute, Box 3203, Sveavägen 59, 103 64 Stockholm, Sweden)

Abstract

The global financial crisis has contributed to the redirection of trade towards new markets outside the OECD area, where both demand patterns and the institutional environment differ from those in the OECD. This study provides an empirical examination of the consequences of this shift, based on Swedish firm-level trade data. Results suggest that weak institutions hamper trade and reduce the length of trade relations, especially for small firms. Trade in industries that are characterized by a high frequency of trade conflicts and where transactions require extensive relationship-specific investments are particularly difficult to redirect towards markets with weak institutions.

Suggested Citation

  • Kokko Ari & Söderlund Bengt & Tingvall Patrik Gustavsson, 2014. "Redirecting International Trade: Contracts, Conflicts, and Institutions," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 234(6), pages 688-721, December.
    • Handle: RePEc:jns:jbstat:v:234:y:2014:i:6:p:688-721
    DOI: 10.1515/jbnst-2014-0604
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    1. Kokko, Ari & Gustavsson Tingvall, Patrik & Videnord, Josefin, 2017. "Which Antidumping Cases Reach the WTO?," Ratio Working Papers 286, The Ratio Institute.

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    More about this item

    Keywords

    Exports; offshoring; trade; institutions; conflicts; contracts;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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