The gravity of institutions in a resource-rich country: the case of Azerbaijan
Ayaz Zeynalov ()
Additional contact information
Ayaz Zeynalov: Charles University in Prague
International Economics and Economic Policy, 2017, vol. 14, issue 2, No 4, 239-261
Abstract:
Abstract This research study analyzes the effects of similarities in economic size and institutional level on bilateral trade. It is interested in whether similarities in country size and at the institutional level encourage enlarging volumes of bilateral trade between countries. Using panel data of the bilateral trade of Azerbaijan with 50 different countries from 1995 to 2012, estimating by random and fixed effects, as well as the Poisson Pseudo Maximum Likelihood (PPML), the study finds that similarity of income size is necessary for increasing bilateral trade across countries. The main finding is that high quality rule of law and more control of corruption boost confidence in international trade, therefore, reliable countries tend to trade more between each other, and less with unreliable countries. Unreliable countries trade more with each other, and less with reliable ones. A large divergence in institutional quality performance reduces bilateral trade across countries. The results show that a long-term contract is one of the main indicator for natural resource exports; therefore distance might not have significant impact on bilateral trade relationships.
Keywords: International trade; Gravity model; Natural resource; Institutional quality (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)
Downloads: (external link)
http://link.springer.com/10.1007/s10368-016-0337-3 Abstract (text/html)
Access to full text is restricted to subscribers.
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:kap:iecepo:v:14:y:2017:i:2:d:10.1007_s10368-016-0337-3
Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10368/PS2
DOI: 10.1007/s10368-016-0337-3
Access Statistics for this article
International Economics and Economic Policy is currently edited by Paul J.J. Welfens, Holger C. Wolf, Christian Pierdzioch and Christian Richter
More articles in International Economics and Economic Policy from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().