INSTITUTIONAL QUALITY AND TRADE IN SELECTED COUNTRIES: THE DYNAMIC PANEL DATA APPROACH
Abstract
The purpose of this article was to investigate the effectiveness of institutional quality on the volume of trade in middle-income and high-income groups in selected countries using panel data. The Results of the estimation usingGeneralized Method of Moments (GMM) in selected countries for the period 2002-2010 shows that the institutional quality has positive and significant effect on the openness in high-income selected countries. As well, the results confirm that institutional quality has negative and significant effect on the openness in selected middle-income countriesReferences
Acemoglu, D., Johnson, S., & Robinson, J. A. (2001). The Colonial Origins of Comparative Development: An Empirical Investigation. American Economic Review, 91, 1369 – 1401.
Acemoglu, D., S. Johnson, S., & Robinson, J. A. (2002). Reversal of fortunes: Geography and institutions in the making of the modern world income distribution. Quarterly Journal of Economic, 117(4), 1231-94.
Alonso, J. A. (2009). The Determinants of Institutional Quality; More on the Debate, Instituto Complutense de Estudios Internacionales, Universidad Complutense de Madrid. Campus de Somosaguas, Finca Mas Ferre. 28223, Pozuelo de Alarcón, Madrid, Spain, avalble at: http://eprints.ucm.es/9665/1/WP_03-09.pdf.
Aoki, M. (2001). Towards a Comparative Institutional Analysis. Cambridge: MIT Press.
Aron, J. (2000). Growth and Institutions: A Review of the Evidence. The World Bank Research observer, 15(1). 1203-1228.
Beck, T., Levin, R., & Loayza, N. (2000). Finance and the source of growth. Journal of Financial Econometrics, 58, 26-310.
Chong, A., & Zanforlin, L. (2000). Law tradition and institutional quality: some empirical evidence. Journal of International Development, 12(8), 1057-1068.
Coase, R. H. (1960). The problem of social cost. Journal of Law and Economics, 3(1), 1–44.
Coase, R. H. (1937). The nature of the firm. Economica, New Series, 4(16), 386–405.
De Groot, H. L. F., Linders, G. J., & Rietveld, P. (2003). Why do OECD countries trade more? Tinbergen Institute Discussion Paper, TI 03-092/3.
Easterly, W., & Levine, R. (2003). Tropics, germs, and crops: how endowments influence economic development. Journal of Monetary Economics, 50(1), 3–39.
Gani, A., & Duncan, R. (2004). Fiji’s governance index, paper presented to the Fiji Update, organized by the Australian National University and the University of the South Pacific, University of the South Pacific, Suva. Available online at: http:// www.usp.ac.fj/index.php?id=piasdg_ downloads_gov.
Greif, A. (2006). Institutions and the Path to Modern Economy. Lessons from Medieval Trade, Cambridge, Cambridge University Press.
Gallup, J. L., J. Sachs., & Mellinger, A. (1998). Geography and Economic Development. NBER Working Paper, No. 6849, Cambridge, Massachusetts, National Bureau of Economic Research.
Hall, R. E., & Jones, C. I. (1999). Why do some countries produce so much more output per worker than others? The Quarterly Journal of Economics, 114(1), 83–116.
Islam, R., & Montenegro, C. (2002). What Determines the Quality of Institutions? Documento elaboradopara el World Development Report: Building Institutions for Markets, Washington.
Kaufmann, D., Kraay, A., & Mastruzzi, M. (2002). Governance matters II: Updated indicators for 2000/01. World Bank Policy Research Working Paper. Washington, D.C., No.2772.
Kaufmann, D., Kraay, A., & Mastruzzi, M. (2004). Governance matters III: Governance indicators for 1996, 1998, 2000, and, 2002. World Bank Economic Review, 18: 253-287.
Kaufmann, D., Kraay, A., & Mastruzzi, M. (2005). Governance matters IV: Governance indicators for 1996-2000. World Bank Policy Research Working Paper, Washington, D.C., 3-30.
Kaufmann, D., Kraay, A., & Mastruzzi, M. (2006a). Measuring governance using perceptions data. In S. R. Ackrman (Ed.). Handbook of economic corruption. New York: Edward Elgar.
Kaufmann, D., Kraay, A., & Mastruzzi, M. (2006b). Governance matters V: Aggregate and individual governance indicators for 1996-2005. World Bank Policy Research Working Paper, Washington, D.C., No. 4012.
Kaufmann, D., Kraay, A., & Mastruzzi, M. (2007a). The worldwide governance indicators project: Answering the critics. World Bank Policy Research Working Paper, Washington, D.C, No.4149.
Kaufmann, D., Kraay, A., & Mastruzzi, M. (2007b). Growth and governance: A reply/rejoinder. Journal of Politics, 69(2): 555-562.
Kaufmann, D., Kraay, A., & Mastruzzi, M. (2007c). Governance matters VI: Aggregate and individual governance indicators for 1996-2006. World Bank Policy Research Working Paper, Washington, D.C. No.4280.
Knack, S., & Azfar, O. (2003). Trade Intensity, Country Size and Corruption. Economic Governance, 4(1), 1–18.
Kolstad, I. (2007). The resource curse: Which institutions matter?
Michelson Institute, 1-7.
La Porta, R., Lopez-de-Silane, F., Shleifer, A and Vishny, R. W. (1997) Legal Determinants of External Finance. Journal of Finance, 52, 1131 – 1150.
La Porta, R., López de Silanes, F., Shleifer, A., & Vishny, R. W. (1999). The Quality of Government. Journal of Law, Economics and Organization, 15, 222-79.
Li, S., & Samsell, D. P. (2009). Why Some Countries Trade More Than Others: The Effect of the Governance Environment on Trade Flows. Corporate Governance: An International Review, 17(1).
Markusen, J., Melvin, J., Kaempfer, W., & Maskus, K. (1995). International Trade Theory and Evidence. Singapore: McGraw-Hill.
North, D. (1981). Structure and Change in Economic History. New York: Norton.
North, D C. (1990). Institutions, Institutional Change, and Economic Performance. Cambridge, U.K.: Cambridge University Press.
North, D. (1991). Institutions. Journal of Economic Perspectives, 5(1): 97-112.
North, D. C. (2005). Institutions and the performance of economies over time. In M. S. C. Mnard (Ed.), the Handbook of New Institutional Economics (pp. 21–30). Springer.
North, D. C. (2005). Understanding the process of economic change. Princeton, N.J.: Princeton University Press.
Ostrom, E. (1990). Governing the commons: the evolution of institutions for collective action. Cambridge, New York: Cambridge University Press.
Ostrom, E. (2005). Understanding Institutional Diversity. Princeton University Press.
Rajan, R. G., & Zingales, L. (2003). The Great Reversals: The Politics of Financial Development in the Twentieth Century. Journal of Financial Economics, 69, 5 – 50.
Rigobon, R., & Rodrik, D. (2004). Rule of Law, Democracy, Openness, and Income: Estimating the Interrelationships. NBER Working Paper, n.10750.
Rodrik, D., Subramanian, A., & Trebbi, F. (2002). Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development. IMF Working Paper, 2(189). Washington.
Rodrik, D. (2003). What do We Learn from Country Narratives? In D. Rodrik (Ed.), In search of prosperity. Analytic narratives on economic growth. Princeton: Princeton University Press.
Rodrik, D., Subramanian, A., & Trebbi, F. (2004). Institutions rule: The primacy of institutions over geography and integration in economic development. Journal of Economic Growth, 9(2), 131–165.
Sachs, J., & Warner, A. (1997). Sources of Slow Growth in African Economies. Journal of African Economies, 6, 335-76.
Wei, S. (2000). Natural Openness and Good Government. NBER Working Paper 7765. Cambridge, Massachusetts: National Bureau of Economic Research.
Wei, S. (2000). Why is Corruption So Much More Taxing than Tax? Arbitrariness Kills. The National Bureau of Economic Research, Working Paper. November.
Williamson, O. E. (1975). Markets and Hierarchies: Analysis and Antitrust Implications. Free Press.
Williamson, O. E. (2000). The new institutional economics: Taking stock, looking ahead. Journal of Economic Literature, 38(3), 595–613.
Wu, J., Li, S., & Samsell, D. (2012). Why some countries trade more, some trade less, some trade almost nothing: The Effect of governance environment on trade flows. International Business Review, 21, 225-238.
Copyright information
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License (Creative Commons Attribution License 3.0 - CC BY 3.0) that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
