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Quality of government and regional trade: Evidence from European Union regions

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  • Rodríguez-Pose, Andrés
  • Barbero Jiménez, Javier
  • Madras, Giovanni
  • Rodríguez-Crespo, Ernesto

Abstract

This paper examines – using a novel database of regional trade flows between 267 European regions for 2013 – how government quality affects trade between European Union (EU) regions. The results of a structural gravity cross-sectional analysis of trade show that trade across EU regions is highly influenced by differences in regional government quality. This influence varies by sector of economic activity and by the level of economic development of the region. The results indicate that, if the less developed regions of the EU want to engage in greater interregional trade, improving their institutional quality is a must.

Suggested Citation

  • Rodríguez-Pose, Andrés & Barbero Jiménez, Javier & Madras, Giovanni & Rodríguez-Crespo, Ernesto, 2021. "Quality of government and regional trade: Evidence from European Union regions," CEPR Discussion Papers 15667, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:15667
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    4. Eduardo Hernandez-Rodriguez & Ron Boschma & Andrea Morrison & Xianjia Ye, 2024. "Functional upgrading and downgrading in global value chains: The role of complementary interregional value chain linkages in EU regions," Papers in Evolutionary Economic Geography (PEEG) 2432, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Oct 2024.
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    6. Zhang, Min & Rodríguez-Pose, Andrés, 2024. "Government reform and innovation performance in China," LSE Research Online Documents on Economics 122728, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    Trade; Quality of government; Institutions; Regional policy; Gravity model of trade; Structural estimation;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy

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