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Interaction between corruption and the GATT-WTO trade effect: a panel data analysis

Author

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  • Suryadipta Roy

    (HIGH POINT UNIVERSITY)

Abstract

Using cross-country time series data for 133 countries between 1984 and 2010, and implementing a fixed effects Poisson estimator using the gravity model of trade, we study the interaction between domestic and partner-country corruption and the treatment effect of a country joining the GATT-WTO on bilateral trade. The results highlight two sources of asymmetry in the effect of corruption on bilateral trade. First, exports rather than imports are found to be affected due to corruption and second, domestic corruption is found to be detrimental to exports from the GATT-WTO members to the non-member nations, but favorable to exports from the non-member countries to the GATT members. The results suggest the importance of accounting for institutional heterogeneity of countries to explain mixed results on the effectiveness of the GATT-WTO for global trade.

Suggested Citation

  • Suryadipta Roy, 2014. "Interaction between corruption and the GATT-WTO trade effect: a panel data analysis," Economics Bulletin, AccessEcon, vol. 34(3), pages 1968-1969.
    • Handle: RePEc:ebl:ecbull:eb-13-00607
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    File URL: http://www.accessecon.com/Pubs/EB/2014/Volume34/EB-14-V34-I3-P180.pdf
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    Cited by:

    1. Shahedul Alam Khan & Rumana Mubin, 2019. "Trade, Governance And The Mediating Role Of Innovation," Romanian Economic Business Review, Romanian-American University, vol. 14(3), pages 29-43, September.

    More about this item

    Keywords

    corruption; GATT/WTO; interaction; gravity; panel data;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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