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New Zealand's trade with Asia and the role of good governance

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  • Gani, Azmat
  • Scrimgeour, Frank

Abstract

This paper investigates if achievements in good governance in Asian countries matter for New Zealand's trade by testing augmented equations of New Zealand's exports to and imports from Asia within the gravity model framework. The empirical findings based on the instrumental variable method of estimation confirm statistically significant inverse correlation of contract enforcement with New Zealand's exports to and imports from Asia. The findings also reveal that New Zealand's exports to Asia are negatively and statistically significantly correlated with Asian political rights and New Zealand's imports from Asia are negatively but statistically insignificantly correlated with Asian political rights. We conclude that as part of wider trade integration New Zealand's Asian trading partners should invest more resources in improving their governance such as instituting mechanisms for better enforcement of contracts and allowing greater political openness.

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  • Gani, Azmat & Scrimgeour, Frank, 2016. "New Zealand's trade with Asia and the role of good governance," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 36-53.
    • Handle: RePEc:eee:reveco:v:42:y:2016:i:c:p:36-53
    DOI: 10.1016/j.iref.2015.10.017
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    Cited by:

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    3. Mohamed Ismail Sabry, 2022. "Arab-German Trade and Institutions: The Effect of Good Governance on Arab Exports to Germany," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(5), pages 2400-2437, October.
    4. Oualid Lajili and Philippe Gilles, 2018. "Financial Liberalization, Political Openness and Growth in Developing Countries: Relationship and Transmission Channels," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 43(1), pages 1-27, March.
    5. Abreo, Carlos & Carrillo, Eduardo & Pédussel Wu, Jennifer, 2023. "Characteristics of Colombian inward foreign direct investment," IPE Working Papers 212/2023, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
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    8. Carlos Abreo & Ricardo Bustillo & Carlos Rodriguez, 2021. "The role of institutional quality in the international trade of a Latin American country: evidence from Colombian export performance," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 10(1), pages 1-21, December.
    9. Luo, Yangyuyu & Bano, Sayeeda, 2020. "Modelling New Zealand dairy products: evidence on export survival and duration," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), July.

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    More about this item

    Keywords

    Governance; New Zealand; Asia; Trade; Contract enforcement; Regulatory quality;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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