Trade aid, institutional quality, and trade

Maruta, Admasu Asfaw

doi:10.1016/j.jeconbus.2018.12.001

Cited by 11 publications

(5 citation statements)

References 35 publications

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“…However, they do not consider the dynamic relationship (Hill et al, 2011;Wooldridge, 2016). Hence, following Heo and Doanh (2015) and Maruta (2019), we opt for the GMM estimator to examine the impacts of the institutional quality on NAFTA's trade flows.…”

Section: Methods Of Estimationmentioning

confidence: 99%

Impact of the institutional quality on NAFTA's international trade: a system GMM approach

Heo

Huyền

Doanh

2020

JES

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PurposeThis paper aims to analyze the impacts of institutional quality on trade flows of NAFTA with a panel data set of 105 countries spanning the period 2006–2017.Design/methodology/approachWe applied the system generalized method of moment (GMM) estimator to investigate the impacts.FindingsThe results show that institutional quality is a positive and significant determinant of international trade flows of the NAFTA bloc and its trading partners. Our results also indicate that the impact of institutional quality depends on the level of economic development of NAFTA's trading partners. Specifically, the trade elasticity of institutional quality is the highest for NAFTA’s trade with middle-income countries and the lowest for NAFTA's trade with low-income countries. In the long run, the trade elasticity of institutional quality increased significantly, with the highest increase in the case of NAFTA's trade with medium-income countries and the lowest increase in the case of NAFTA's trade with low-income countries.Originality/valueThis study contributes to the existing literature in three different ways. First, we examine the differential impact of institutions on NAFTA's trade according to the level of economic development of NAFTA's trading partners. Second, we compare the differential trade elasticity of institutional quality in the long run. Finally, we support our findings through an improved research methodology by using the system GMM estimation. This method allows us to overcome the potential sample bias, omitted variable problems and endogeneity of explanatory variables.

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Section: Methods Of Estimationmentioning

confidence: 99%

Impact of the institutional quality on NAFTA's international trade: a system GMM approach

Heo

Huyền

Doanh

2020

JES

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“…Enhanced institutional strength within a country can expedite trade liberalization, international investment, and local economic growth. Maruta (123) employed an instrumental variable analysis to ascertain the influence of institutional quality on global trade. The study validates a positive correlation between institutional robustness and commercial liberalization.…”

Section: Institutional Quality and Trade Opennessmentioning

confidence: 99%

Do environmental and institutional quality attribute to inflows of FDI in Lower-Middle income Nations? Evidences from asymmetric investigation

Qamruzzaman¹

2023

GSC Adv. Res. Rev.

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The present study investigates the correlation between environmental and institutional quality and their influence on the inflow of foreign direct investment (FDI) in lower-middle income countries. Employing an asymmetric investigation approach, the study endeavors to furnish all-encompassing insights into the determinants of Foreign Direct Investment (FDI) and their diverse effects across disparate nations. Based on empirical analysis and econometric modeling, it has been determined that FDI inflows are significantly impacted by both environmental and institutional quality. Countries that exhibit superior environmental quality, characterized by effective pollution control measures and sustainable resource management, tend to attract greater levels of foreign direct investment (FDI). Likewise, robust institutional quality, distinguished by sound governance, transparent regulations, effective legal systems, and diminished corruption, has a favorable impact on the inflow of foreign direct investment (FDI). Additionally, the study reveals asymmetric effects, indicating that the correlation between FDI inflows and environmental and institutional quality varies among countries depending on their individual circumstances. The aforementioned findings emphasize the significance of tackling environmental and institutional elements in order to draw in foreign direct investment and encourage sustainable economic development. The study's conclusion suggests implementing policies to enhance environmental quality, fortify institutional frameworks, and customize strategies according to country-specific contexts to augment FDI inflows in lower-middle income nations. By implementing these measures, policymakers can establish an appealing investment environment, leverage environmental benefits, and promote sustainable development.

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“…The study established a partially significant relationship between institutional quality and telecommunication for the efficiency of the trade sector in African countries. The study of Maruta (2019) added an important factor of trade aid along with institutional quality to explore the effects on trade. The interaction term of aid and institutional quality has positive implications for the growth trade.…”

Section: Institutional Quality and Trade Growthmentioning

confidence: 99%

Impact of Institutional Quality on Trade Performance of Small and Medium Enterprises in Pakistan

Khan

Naqvi

2022

Journal of Economic Sciences

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The trade economy is dependent upon the institutional quality of the country. It affects the ease of doing business in the economy. It is plausible to think that, how institutional quality can affect the trading performance of Pakistan. Small & medium enterprises (SMEs) are playing the role of the backbone of the trade sector in Pakistan. Contribution SMEs can be significantly improved, by improving the supporting macroeconomic indicators. This paper studies the short-run and the long-run association between SME trade growth and cost of production, relative prices, and Institutional quality in Pakistan. It also examines the Environmental Kuznets curve (EKC) hypothesis, between SME trade growth and institutional quality in Pakistan. This study utilizes secondary data, which is taken from multiple secondary sources, including the SMEDA, Pakistan Economic Survey, and world development indicators. The biannual data is assembled up for 38 observations from (2000 to 2019). This study uses Auto Regressive Distributive Lag (ARDL) bound testing method to examine the short run and long run connections between SMEs’ trade growth and macro-economic variables, like; relative prices, Cost of production. Gross Domestic Product, exchange rate, and institutional quality. These variables are selected from the available literature. The study finds that the short-run response of SMEs trade is not significant, but it significantly responds to macro-economic indicators in long run. The institutional quality has a non-linear relationship with SMEs trade growth. This indicates that the pollution heaven hypothesis holds valid even for the case of institutional quality and SMEs trading performance. The study focuses on the optimality of institutional quality for the optimal performance level of SMEs in Pakistan.

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Trade aid, institutional quality, and trade

Cited by 11 publications

References 35 publications

Impact of the institutional quality on NAFTA's international trade: a system GMM approach

Impact of the institutional quality on NAFTA's international trade: a system GMM approach

Do environmental and institutional quality attribute to inflows of FDI in Lower-Middle income Nations? Evidences from asymmetric investigation

Impact of Institutional Quality on Trade Performance of Small and Medium Enterprises in Pakistan

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