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The Multifaceted Impact of Corruption on International Trade

Author

Listed:
  • Thede, Susanna

    () (Department of Economics, Lund University)

  • Gustafson, Nils-Åke

    (Department of Economics, Lund University)

Abstract

The purpose of this paper is to perform a detailed examination of corruption effects on trade based on corruption characteristics known to affect economic exchange within the corruption research field. These characteristics are the level, prevalence, customs location, function and predictability of corruption. The multifaceted corruption impact on trade is empirically examined using a corruption-augmented gravity equation. The equation is estimated using a Heckman version of a GMM instrumental variable method. Our results provide strong evidence of that import flows vary systematically with the investigated corruption characteristics and enable the identification of channels through which corruption affects international trade. The empirical investigation clearly indicates the need to examine the multifaceted role of corruption to properly assess the trade effects of corruption.

Suggested Citation

  • Thede, Susanna & Gustafson, Nils-Åke, 2009. "The Multifaceted Impact of Corruption on International Trade," Working Papers 2009:13, Lund University, Department of Economics.
  • Handle: RePEc:hhs:lunewp:2009_013
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    References listed on IDEAS

    as
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    14. repec:hrv:faseco:30747160 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Mohammad Mahdi Ghodsi, 2012. "Corruption and the Level of Trade Protectionism," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 30.
    2. Juan C. Correa & Klaus Jaffe, 2015. "Corruption and Wealth: Unveiling a national prosperity syndrome in Europe," Papers 1604.00283, arXiv.org.
    3. Andrzej Cieślik & Łukasz Goczek, 2015. "Corruption and Export Performance in Post-communist Countries: Evidence from Firm-level Data," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 42.
    4. Paulus, Michal & Kristoufek, Ladislav, 2015. "Worldwide clustering of the corruption perception," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 428(C), pages 351-358.
    5. Frank R. Gunter, 2013. "The Political Economy of Iraq," Books, Edward Elgar Publishing, number 14293, April.
    6. repec:prg:jnlpep:v:preprint:id:647:p:1-19 is not listed on IDEAS
    7. repec:eee:ecmode:v:70:y:2018:i:c:p:115-126 is not listed on IDEAS
    8. Salvador Gil-Pareja & Rafael Llorca-Vivero & José Antonio Martínez-Serrano, 2017. "Corruption and International Trade: A Comprehensive Analysis with Gravity," Working Papers 1705, Department of Applied Economics II, Universidad de Valencia.
    9. Othmani, Abdelhafidh & Slimani, Slah & Bakari, Sayef, 2015. "Les Effets de la Corruption sur le Commerce Extérieur de la Tunisie : Une Approche du Modèle de Gravité Statique durant la Période 1999-2012," MPRA Paper 80894, University Library of Munich, Germany.
    10. Othmani, Abdelhafidh & Slimani, Slah & Bakari, Sayef, 2015. "Les Effets de la Concurrence sur le Commerce Extérieur de la Tunisie : Une Approche du Modèle de Gravité Statique durant la Période 1999-2012
      [The Effects of Competition on Foreign Trade in Tunisia
      ," MPRA Paper 80885, University Library of Munich, Germany.

    More about this item

    Keywords

    Bilateral trade; Corruption; GMM Estimations;

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • F10 - International Economics - - Trade - - - General
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

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