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Trade, Governance And The Mediating Role Of Innovation

Author

Listed:
  • Shahedul Alam Khan

    (Leading University, Sylhet)

  • Rumana Mubin

    (University of Dhaka)

Abstract

The purpose of the study is to review the direct and indirect effect of governance and innovation on International Trade and the mediating effect of innovation on the indirect relation between governance and international trade. Simple and multiple regression analysis was used on data from 119 countries to test the simple mediation model in this study. A significant direct relationship is evident between country’s governance and innovation as well as between its innovation and trade. But governance indirectly influences international trade as the relation between them is partially mediated by innovation. In this complementary partial mediation, the 65% of positive effect of governance on international trade is through innovation. Consequently, governments should focus on its governance to facilitate innovation in their countries in order to better perform in trade globally. The role of innovation will be high-lightened in paper in shaping the relationship between governance and international trade. Moreover, the nature of influence of governance on international trade was identified in the paper.

Suggested Citation

  • Shahedul Alam Khan & Rumana Mubin, 2019. "Trade, Governance And The Mediating Role Of Innovation," Romanian Economic Business Review, Romanian-American University, vol. 14(3), pages 29-43, September.
    • Handle: RePEc:rau:journl:v:14:y:2019:i:3:p:29-43
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