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What does “doing business” really measure? Evidence from trade times

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  • Sharafeyeva, Alfinura
  • Shepherd, Ben

Abstract

The World Bank’s Doing Business project claims to provide “objective measures of business regulations in 190 economies”. In the trade literature, a key use of these data has been to show the impact of border delays on trade performance. We revisit previous results using a structural gravity model and panel data for 2005–2015. Although we confirm the original finding, we also show that trade times have a negative and statistically significant impact on services trade—even though services do not in reality experience border delays. The effect is due to an apparent mixing in the Doing Business data of aspects of a country’s institutional environment with information on trade times. Our results provide a caution for applied researchers, and policymakers using these data to track performance.

Suggested Citation

  • Sharafeyeva, Alfinura & Shepherd, Ben, 2020. "What does “doing business” really measure? Evidence from trade times," Economics Letters, Elsevier, vol. 192(C).
    • Handle: RePEc:eee:ecolet:v:192:y:2020:i:c:s0165176520301555
    DOI: 10.1016/j.econlet.2020.109215
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    References listed on IDEAS

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    More about this item

    Keywords

    International trade; Trade policy; Trade facilitation;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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