Abstract
Purpose The purpose of this paper is to examine the export, import, and total trade determinants using reduced form equations for six Pacific Island countries (PICs) with an institutional focus. Design/methodology/approach A fixed effects model, controlling for AR(1) errors, using panel data for selected PICs is utilized. Controlling for common determinants of trade, four indicators of institutional quality: government effectiveness; rule of law; regulatory quality; and control of corruption are tested. Findings The empirical results indicate that improvements in institutional quality variables matter for improved levels of trade. The results also provide confirmation that the appreciation of currency does not significantly harm trade; higher levels of technological diffusion are vital for improved trade; and that gradual liberalization of trade through tariff reduction strongly facilitates more trade. Practical implications This study clearly points out that the institutional quality in the selected countries is a significant factor in determining the level of trade. Originality/value This paper expresses the view that institutions matter for enhanced trade.
| Original language | English |
|---|---|
| Pages (from-to) | 123-138 |
| Number of pages | 16 |
| Journal | Journal of International Trade Law and Policy |
| Volume | 7 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - Dec 5 2008 |
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Keywords
- Governance
- Organizations
- Pacific region
- Trade
ASJC Scopus subject areas
- Industrial relations
- Political Science and International Relations
- Economics, Econometrics and Finance(all)
- Law
Cite this
The relationship between institutional quality and trade in Pacific Island countries. / Gani, Azmat; Chand Prasad, Biman.
In: Journal of International Trade Law and Policy, Vol. 7, No. 2, 05.12.2008, p. 123-138.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - The relationship between institutional quality and trade in Pacific Island countries
AU - Gani, Azmat
AU - Chand Prasad, Biman
PY - 2008/12/5
Y1 - 2008/12/5
N2 - Purpose The purpose of this paper is to examine the export, import, and total trade determinants using reduced form equations for six Pacific Island countries (PICs) with an institutional focus. Design/methodology/approach A fixed effects model, controlling for AR(1) errors, using panel data for selected PICs is utilized. Controlling for common determinants of trade, four indicators of institutional quality: government effectiveness; rule of law; regulatory quality; and control of corruption are tested. Findings The empirical results indicate that improvements in institutional quality variables matter for improved levels of trade. The results also provide confirmation that the appreciation of currency does not significantly harm trade; higher levels of technological diffusion are vital for improved trade; and that gradual liberalization of trade through tariff reduction strongly facilitates more trade. Practical implications This study clearly points out that the institutional quality in the selected countries is a significant factor in determining the level of trade. Originality/value This paper expresses the view that institutions matter for enhanced trade.
AB - Purpose The purpose of this paper is to examine the export, import, and total trade determinants using reduced form equations for six Pacific Island countries (PICs) with an institutional focus. Design/methodology/approach A fixed effects model, controlling for AR(1) errors, using panel data for selected PICs is utilized. Controlling for common determinants of trade, four indicators of institutional quality: government effectiveness; rule of law; regulatory quality; and control of corruption are tested. Findings The empirical results indicate that improvements in institutional quality variables matter for improved levels of trade. The results also provide confirmation that the appreciation of currency does not significantly harm trade; higher levels of technological diffusion are vital for improved trade; and that gradual liberalization of trade through tariff reduction strongly facilitates more trade. Practical implications This study clearly points out that the institutional quality in the selected countries is a significant factor in determining the level of trade. Originality/value This paper expresses the view that institutions matter for enhanced trade.
KW - Governance
KW - Organizations
KW - Pacific region
KW - Trade
UR - http://www.scopus.com/inward/record.url?scp=84993087813&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84993087813&partnerID=8YFLogxK
U2 - 10.1108/14770020810927327
DO - 10.1108/14770020810927327
M3 - Article
VL - 7
SP - 123
EP - 138
JO - Journal of International Trade Law and Policy
JF - Journal of International Trade Law and Policy
SN - 1477-0024
IS - 2
ER -