Arbeitspapier

Institutional Quality and the Gains From Trade

While theoretical models suggest that trade is likely to increase productivity and income levels, the empirical evidence is rather mixed. For some countries, trade has a strong impact on growth, whereas for other countries there is no or even a negative linkage. We examine one likely prerequisite for a welfare increasing impact of trade, that is, the role of institutional quality. Using several model specifications, including an instrumental variable approach, we identify those aspects of institutional quality that matter most for the positive linkage between trade and growth. We find that, above all, labour market regulation is the key to reducing trade-related adjustment costs. Market entry regulations, the efficiency of the tax system, the rule of law and government effectiveness do play a role too. In essence, the results demonstrate that countries with low-quality institutions are less likely to benefit from trade.

Sprache
Englisch

Erschienen in
Series: HWWA Discussion Paper ; No. 341

Klassifikation
Wirtschaft
Other Economic Systems: Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
Economics of Regulation
Trade and Labor Market Interactions
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
Thema
Trade
Income Levels
Institutional Quality
Regulations
Good Governance
Außenwirtschaft
Wirtschaftswachstum
Einkommenseffekt
Good Governance
Neue Institutionenökonomik

Ereignis
Geistige Schöpfung
(wer)
Borrmann, Axel
Busse, Matthias
Neuhaus, Silke
Ereignis
Veröffentlichung
(wer)
Hamburg Institute of International Economics (HWWA)
(wo)
Hamburg
(wann)
2006

Handle
Letzte Aktualisierung
10.03.2025, 11:41 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Borrmann, Axel
  • Busse, Matthias
  • Neuhaus, Silke
  • Hamburg Institute of International Economics (HWWA)

Entstanden

  • 2006

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