Governance, Corruption and Trade : A North-South Approach
AbstractThe purpose of this paper is to assess the effect on North South trade of the quality of governance in developing countries by applying a gravity trade model. I test the model for a sample of 21 OECD countries and 95 developing countries over the period 1984-1997. A panel data analysis is used to disentangle the time invariant country-specific effects and to capture the relationship between the relevant variables over time. The estimation results show that the better governed a developing country is, the more it imports goods from industrialised ones. Besides, thanks to a non linear approximation, it shows that the two traditional visions of the consequences of corruption on trade coexist.
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Bibliographic InfoPaper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/4090.
Date of creation: May 2005
Date of revision:
Bilateral trade flows; panel econometrics; gravity model; corruption; governance;
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