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Does corruption facilitate trade for the new EU members?

Author

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  • Horsewood, Nicholas
  • Voicu, Anca Monika

Abstract

The paper uses a gravity model to examine the role of corruption in the direction of trade in a data set comprising OECD economies, new EU members and developing nations. Contrary to a number of studies, the findings suggest that membership of the RTAs does not always increase bilateral trade whereas reducing a country's corruption does tend to increase trade flows. The results suggest that EU membership, with the associated improvement in the perceived level of corruption, should have a positive impact on Romania and Bulgaria.

Suggested Citation

  • Horsewood, Nicholas & Voicu, Anca Monika, 2011. "Does corruption facilitate trade for the new EU members?," Economics Discussion Papers 2011-53, Kiel Institute for the World Economy (IfW).
  • Handle: RePEc:zbw:ifwedp:201153
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    References listed on IDEAS

    as
    1. Laaser, Claus-Friedrich & Schrader, Klaus, 2002. "European integration and changing trade patterns: the case of the Baltic states," Kiel Working Papers 1088, Kiel Institute for the World Economy (IfW).
    2. Limao, Nuno & Venables, Anthony J., 1999. "Infrastructure, geographical disadvantage, and transport costs," Policy Research Working Paper Series 2257, The World Bank.
    3. Ghosh, Sucharita & Yamarik, Steven, 2004. "Does trade creation measure up? A reexamination of the effects of regional trading arrangements," Economics Letters, Elsevier, vol. 82(2), pages 213-219, February.
    4. K. Kalirajan, 1999. "Stochastic varying coefficients gravity model: An application in trade analysis," Journal of Applied Statistics, Taylor & Francis Journals, vol. 26(2), pages 185-193.
    5. Repkine, Alexandre & Walsh, Patrick Paul, 1999. "Evidence of European Trade and Investment U-Shaping Industrial Output in Bulgaria, Hungary, Poland, and Romania," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 730-752, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    trade; corruption; EU membership;

    JEL classification:

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

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