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Better legal institutions: An intertemporal effect on export composition

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  • Jiwook Yoo

    (Federal Reserve Board)

Abstract

The quality of a country's legal institutions is an important source of comparative advantage, yet few studies look at how this source of comparative advantage develops over time. Using export data from 1996 - 2016, I examine the intertemporal effect of an improvement in a country's legal institutions on its export composition. I do this by exploiting variation in the quality of these institutions prompted by the conditionality of European Union membership. I find evidence that, in both the short and long run, countries that improve their legal institutions shift their export compositions towards industries more reliant on the attributes of good legal institutions. I also find evidence that this effect is weaker for countries where legal institutions were already strong.

Suggested Citation

  • Jiwook Yoo, 2019. "Better legal institutions: An intertemporal effect on export composition," Economics Bulletin, AccessEcon, vol. 39(4), pages 2823-2829.
    • Handle: RePEc:ebl:ecbull:eb-19-00929
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    International Trade; Legal Institutions;

    JEL classification:

    • F1 - International Economics - - Trade
    • K3 - Law and Economics - - Other Substantive Areas of Law

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