Better legal institutions: An intertemporal effect on export composition

Jiwook Yoo ()
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Jiwook Yoo: Federal Reserve Board

Economics Bulletin, 2019, vol. 39, issue 4, 2823-2829

Abstract: The quality of a country's legal institutions is an important source of comparative advantage, yet few studies look at how this source of comparative advantage develops over time. Using export data from 1996 - 2016, I examine the intertemporal effect of an improvement in a country's legal institutions on its export composition. I do this by exploiting variation in the quality of these institutions prompted by the conditionality of European Union membership. I find evidence that, in both the short and long run, countries that improve their legal institutions shift their export compositions towards industries more reliant on the attributes of good legal institutions. I also find evidence that this effect is weaker for countries where legal institutions were already strong.

Keywords: International Trade; Legal Institutions (search for similar items in EconPapers)
JEL-codes: F1 K3 (search for similar items in EconPapers)
Date: 2019-12-11
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