Discussion Paper
No. 2011-53 |
December 09, 2011
Does Corruption Facilitate Trade for the New EU Members?
(Published in Trade Facilitation, Transport Costs and Logistics: A New Challenge for European Competitiveness)
Abstract
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
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