The paper uses a gravity model to examine the role of corruption in the direction of trade in a data set comprising OECD economies, new EU members and developing nations. Contrary to a number of studies, the findings suggest that membership of the RTAs does not always increase bilateral trade whereas reducing a country’s corruption does tend to increase trade flows. The results suggest that EU membership, with the associated improvement in the perceived level of corruption, should have a positive impact on Romania and Bulgaria.
Paper submitted to the special issue
Trade Facilitation, Transport Costs and Logistics: A New Challenge for European Competitiveness