IDEAS home Printed from https://ideas.repec.org/a/taf/ginixx/v36y2010i4p335-362.html
   My bibliography  Save this article

International Trade and Domestic Legal Systems: Examining the Impact of Islamic Law

Author

Listed:
  • Emilia Justyna Powell
  • Stephanie J. Rickard

Abstract

What factors determine countries' international trade relations? Recent theories point to the potential importance of domestic legal traditions. Countries' legal systems influence the enforcement of contracts. This has been shown to affect trade flows in common law and civil law countries. However, these two legal systems do not constitute the universe of legal traditions. Islamic law is an important and fundamentally distinct legal system that has been largely overlooked. In this article, we offer the first direct test of the effect of Islamic law on countries' trade relations. We find that, on average, levels of bilateral trade are lowest among Islamic law states, holding all else constant. This finding suggests that, contrary to conventional wisdom, shared institutions alone are insufficient to enhance trade flows. Instead, levels of bilateral trade depend critically on the quality of shared institutions. The importance of countries' legal systems for trade declines over time, possibly due to the increased role of international arbitration bodies and/or the standardization of international sales contracts.

Suggested Citation

  • Emilia Justyna Powell & Stephanie J. Rickard, 2010. "International Trade and Domestic Legal Systems: Examining the Impact of Islamic Law," International Interactions, Taylor & Francis Journals, vol. 36(4), pages 335-362, November.
    • Handle: RePEc:taf:ginixx:v:36:y:2010:i:4:p:335-362
    DOI: 10.1080/03050629.2010.523668
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/03050629.2010.523668
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/03050629.2010.523668?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hoon Lee & Joseph L. Staats & Glen Biglaiser, 2012. "The importance of legal systems for portfolio investment in the developing world," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 15(4), pages 339-358, December.

    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:taf:ginixx:v:36:y:2010:i:4:p:335-362. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/GINI20 .

    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.