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The Effect of Domestic Institutions on International Trade Flows: A sectoral analysis

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  • Gert-Jan Linders

Abstract

Barriers to international trade are more sizeable than can be accounted for on the basis of formal trade barriers and transport costs alone. Search costs in the international marketplace and insecurity of property and contract enforcement have recently been stressed to explain this observation. This paper proposes that both elements can be combined to explain observed trade patterns. Distinguishing between homogeneous and differentiated product groups, we estimate gravity equations to investigate how patterns of bilateral trade are affected by variation in the quality of institutions across countries. JEL codes: F14, F15 Keywords: institutions, bilateral trade, gravity model, sectoral analysis, markets

Suggested Citation

  • Gert-Jan Linders, 2004. "The Effect of Domestic Institutions on International Trade Flows: A sectoral analysis," ERSA conference papers ersa04p357, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa04p357
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    1. Arief Bustaman & Rina Indiastuti & B. Budiono & Titik Anas, 2022. "Quality of Indonesia’s domestic institutions and export performance in the era of global value chains," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 11(1), pages 1-29, December.
    2. Tania El Kallab & Cristina Terra, 2018. "French Colonial Trade Patterns and European Settlements," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 60(3), pages 291-331, September.

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    More about this item

    Keywords

    institutions; bilateral trade; gravity model; sectoral analysis; markets;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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