Redirecting International Trade: Contracts, Conflicts, and Institutions

Ari Kokko, Bengt Söderlund and Patrik Tingvall

No 226, Ratio Working Papers from The Ratio Institute

Abstract: The global financial crisis has accelerated the redirection of trade towards new markets, outside the OECD area, where both demand patterns and the institutional environment differ from those in the OECD. This study provides an empirical examination of the consequences of this shift. Results suggest that weak institutions hamper trade and reduces the length of trade relations, especially for small firms. Furthermore, trade in industries that are characterized by a high degree of trade conflicts and that requires extensive relationship specific investments for trade to occur are comparatively difficult to redirect towards markets with weak institutions.

Keywords: Exports; Offshoring; Trade; Institutions; Conflicts; Contracts (search for similar items in EconPapers)
JEL-codes: F23 F55 K00 P48 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2013-12-04
New Economics Papers: this item is included in nep-int
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Journal Article: Redirecting International Trade: Contracts, Conflicts, and Institutions (2014)
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