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Institutions, Trade Policy and Trade Flows

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  • Jansen, Marion
  • Nordås, Hildegunn Kyvik

Abstract

This Paper analyses to which extent domestic institutions affect trade flows. We use two complementary approaches, one focusing on the size of total trade flows and one focusing on bilateral trade patterns (gravity equation). We also control for two other domestic policy variables: trade policy and domestic infrastructure. We find that the quality of institutions has a positive and significant impact on a country’s level of openness. Domestic tariffs have no statistically significant impact alone, but do affect total trade flows when combined with good institutions. Domestic institutions also have a positive and significant impact on bilateral trade flows, but the parameter of our institution variables is reduced by almost a half and may turn insignificant when the quality of domestic infrastructure is included in the regression.

Suggested Citation

  • Jansen, Marion & Nordås, Hildegunn Kyvik, 2004. "Institutions, Trade Policy and Trade Flows," CEPR Discussion Papers 4418, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:4418
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    Citations

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    Cited by:

    1. Iwanow, Tomasz & Kirkpatrick, Colin, 2009. "Trade Facilitation and Manufactured Exports: Is Africa Different?," World Development, Elsevier, vol. 37(6), pages 1039-1050, June.
    2. Tomasz Iwanow & Colin Kirkpatrick, 2007. "Trade facilitation, regulatory quality and export performance," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(6), pages 735-753.
    3. Apanard Penny Angkinand & Eric M.P. Chiu, 2011. "Will institutional reform enhance bilateral trade flows? Analyses from different reform aspects," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 14(3), pages 243-258, September.
    4. FE, Doukouré Charles, 2011. "Qualité des Institutions et Commerce International: Évidence à Partir des Exportations de l'UEMOA
      [Institutions Quality and International Trade: Evidence from WAEMU Exports]
      ," MPRA Paper 33333, University Library of Munich, Germany.
    5. Tamer Afifi, "undated". "Institutional Reform: a Step Towards Free Trade in Egypt," EcoMod2006 272100001, EcoMod.
    6. repec:ebd:wpaper:159 is not listed on IDEAS
    7. Karen Crabbé & Michel Beine, 2009. "Trade, Institutions and Export Specialization," LICOS Discussion Papers 23409, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    8. repec:ilo:ilowps:374452 is not listed on IDEAS
    9. Sugata Marjit & Biswajit Mandal, "undated". "Corruption and Trade in General Equilibrium," Discussion Papers 08/15, University of Nottingham, GEP.
    10. Celbis, Mehmet Güney & Nijkamp, Peter & Poot, Jacques, 2013. "How big is the impact of infrastructure on trade? Evidence from meta-analysis," MERIT Working Papers 032, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    11. Kyvik Nord°as, Hildegunn., 2005. "Labour implications of the textiles and clothing quota phase-out," ILO Working Papers 993744523402676, International Labour Organization.
    12. World Bank, 2012. "Afghanistan Diagnostics Trade Integration Study," World Bank Other Operational Studies 13215, The World Bank.

    More about this item

    Keywords

    bilateral trade flows; gravity model; institutional quality; openness;

    JEL classification:

    • F10 - International Economics - - Trade - - - General

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