IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v8y2024i6p2254-2263.html
   My bibliography  Save this article

The Relationship between Institutional Framework and International Trade: An Application of the Gravity Model

Author

Listed:
  • Jude Omokugbo OBASANMI

    (Department of Economics, Faculty of Social Sciences, Ambrose Alli University, Ekpoma, Nigeria)

  • Festus Osasere IMASUEN

    (Dept. of Business Administration and Management, Sch. Of Business, Edo State Polytechnic, Usen, Edo State, Nigeria.)

Abstract

This study empirical investigated the relationship between institutional framework and Nigerian Trade spanning from 1998 to 2023 through the application of gravity model. The study considered rule of law (RoL), government effectiveness (GE), control of corruption (CoC), regulatory quality (RQ) and political and operational stability (POS) as tenets of institutional framework. The gravity regression model was used to determine the direction and magnitude of the independent variables on the dependent variable. The matrix correlation was used to check for multicollinearity among the independent variables, while the descriptive statistics was used to test for the normality of the variables. The results revealed that Nigeria has weak institutional framework. Also, the result revealed that POS, RoL and CoC had significant impact on Nigerian trade while RQ and GE had insignificant impact on Nigerian trade. The researcher recommended that Nigeria government should improve on its current institutional framework statue in-order to improve its trade.

Suggested Citation

  • Jude Omokugbo OBASANMI & Festus Osasere IMASUEN, 2024. "The Relationship between Institutional Framework and International Trade: An Application of the Gravity Model," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(6), pages 2254-2263, June.
    • Handle: RePEc:bcp:journl:v:8:y:2024:i:6:p:2254-2263
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-8-issue-6/2254-2263.pdf
    Download Restriction: no
    File URL: https://rsisinternational.org/journals/ijriss/articles/the-relationship-between-institutional-framework-and-international-trade-an-application-of-the-gravity-model/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Francois, Joseph & Manchin, Miriam, 2013. "Institutions, Infrastructure, and Trade," World Development, Elsevier, vol. 46(C), pages 165-175.
    2. Carlos Abreo & Ricardo Bustillo & Carlos Rodriguez, 2021. "The role of institutional quality in the international trade of a Latin American country: evidence from Colombian export performance," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 10(1), pages 1-21, December.
    3. Kyaw Kyaw Lynn, 2015. "An Analysis of the Relationship between Foreign Trade and Economic Growth in Myanmar during 1990-2014," International Journal of Business and Administrative Studies, Professor Dr. Bahaudin G. Mujtaba, vol. 1(4), pages 114-131.
    4. Henri L. F. De Groot & Gert‐Jan Linders & Piet Rietveld & Uma Subramanian, 2004. "The Institutional Determinants of Bilateral Trade Patterns," Kyklos, Wiley Blackwell, vol. 57(1), pages 103-123, February.
    5. Abubakar, Sule, 2020. "Institutional Quality and Economic Growth: Evidence from Nigeria," African Journal of Economic Review, African Journal of Economic Review, vol. 8(1), January.
    6. James E. Anderson & Douglas Marcouiller, 2002. "Insecurity And The Pattern Of Trade: An Empirical Investigation," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 342-352, May.
    7. Abban, Stanley, 2020. "The impact of institutions and infrastructure on intra-regional trade: The Economic Community of West African States," MPRA Paper 104382, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Prabir De, 2010. "Governance, Institutions, and Regional Infrastructure in Asia," Governance Working Papers 22878, East Asian Bureau of Economic Research.
    2. Álvarez, Inmaculada C. & Barbero, Javier & Rodríguez-Pose, Andrés & Zofío, José L., 2018. "Does Institutional Quality Matter for Trade? Institutional Conditions in a Sectoral Trade Framework," World Development, Elsevier, vol. 103(C), pages 72-87.
    3. Shadrack Muthami Mwatu, 2022. "Institutions and export performance: firm level evidence from Kenya," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 69(4), pages 487-506, December.
    4. Bojnec, Stefan & Ferto, Imre, 2009. "Communication Costs and Agro-Food Trade in OECD Countries," 83rd Annual Conference, March 30 - April 1, 2009, Dublin, Ireland 50937, Agricultural Economics Society.
    5. Beverelli, Cosimo & Keck, Alexander & Larch, Mario & Yotov, Yoto, 2018. "Institutions, Trade and Development: A Quantitative Analysis," School of Economics Working Paper Series 2018-3, LeBow College of Business, Drexel University.
    6. Saima Nawaz, 2020. "Institutions, Regional Integration and Bilateral Trade in South Asia: PPML Based Evidence," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 59(2), pages 221-242.
    7. Mehmet Huseyin Bilgin & Giray Gozgor & Chi Keung Marco Lau, 2017. "Institutions and gravity model: the role of political economy and corporate governance," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 7(3), pages 421-436, December.
    8. Matthias Helble & Ben Shepherd & John S. Wilson, 2009. "Transparency and Regional Integration in the Asia Pacific," The World Economy, Wiley Blackwell, vol. 32(3), pages 479-508, March.
    9. Sebil Olalekan Oshota & Bashir Adelowo Wahab, 2022. "Institutional Quality and Intra-Regional Trade Flows: Evidence from ECOWAS," Journal of African Trade, Springer, vol. 9(1), pages 73-106, December.
    10. Gnangnon, Sèna Kimm & Iyer, Harish, 2021. "Effect of Aid for Trade and Foreign Direct Investment Inflows on the Utilization of Unilateral Trade Preferences offered by the QUAD countries," EconStor Preprints 238211, ZBW - Leibniz Information Centre for Economics.
    11. Das, Joy & Tanger, Shaun & Fannin, J. Matthew & Kennedy, P. Lynn, 2020. "Institutional Determinant of Market Concentration and Trade in a General Equilibrium Setup," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304458, Agricultural and Applied Economics Association.
    12. Gani, Azmat & Scrimgeour, Frank, 2016. "New Zealand's trade with Asia and the role of good governance," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 36-53.
    13. Mamadou Bah & Henri Atangana Ondoa & Koffi Délali Kpognon, 2021. "Effects of governance quality on exports in Sub-Saharan Africa," International Economics, CEPII research center, issue 167, pages 1-14.
    14. Jessie Lin & Insa Flachsbarth & Stephan von Cramon‐Taubadel, 2020. "The role of institutional quality on the performance in the export of coconut products," Agricultural Economics, International Association of Agricultural Economists, vol. 51(2), pages 237-258, March.
    15. Prabir De, 2010. "Governance, Institutions, and Regional Infrastructure in Asia," Working Papers id:3029, eSocialSciences.
    16. Helble, Matthias & Shepherd, Ben & Wilson, John S., 2007. "Transparency, trade costs, and regional integration in the Asia Pacific," Policy Research Working Paper Series 4401, The World Bank.
    17. Azmat Gani, 2018. "Contract Enforcement and Trade," Journal of Industry, Competition and Trade, Springer, vol. 18(1), pages 107-119, March.
    18. Lin, J., 2018. "The role of institutions in international coconut trade: a gravity model approach," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277012, International Association of Agricultural Economists.
    19. Anthony Briant & Pierre-Philippe Combes & Miren Lafourcade, 2014. "Product Complexity, Quality of Institutions and the Protrade Effect of Immigrants," The World Economy, Wiley Blackwell, vol. 37(1), pages 63-85, January.
    20. Fetzer, James J. & Rivera, Sandra A., 2005. "Modeling Modifications in Rules of Origin: A Partial Equilibrium Approach," Conference papers 331372, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:8:y:2024:i:6:p:2254-2263. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.