Does Trade Foster Institutions? An Empirical Assessment
AbstractThe relationship between trade and institutions has been extensively debated by trade economists and political scientists. The aim of the present paper is to provide some empirical evidence on the causal relationship between institutions and trade flows in a panel framework. We present a Granger causality test (1969) as well as a Hurlin and Venet (2001) test for panel data using a bilateral trade flows panel that covers 29 years. The issue of zero flows of trade is handled by using a panel Poisson Pseudo-Maximum Likelihood estimator.
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Bibliographic InfoArticle provided by Università di Perugia in its journal Review of Economics and Institutions.
Volume (Year): 2 (2011)
Issue (Month): 2 ()
institutional quality; Granger causality test; panel data; zero trade flows;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
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- Law, Siong Hook & Lim, Thong Cheen & Ismail, Normaz Wana, 2013. "Institutions and economic development: A Granger causality analysis of panel data evidence," Economic Systems, Elsevier, vol. 37(4), pages 610-624.
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