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Quality of government and regional trade: Evidence from European Union regions

Javier Barbero, Giovanni Madras, Ernesto Rodríguez-Crespo and Andrés Rodríguez-Pose ()

No 15667, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper examines â?? using a novel database of regional trade flows between 267 European regions for 2013 â?? how government quality affects trade between European Union (EU) regions. The results of a structural gravity cross-sectional analysis of trade show that trade across EU regions is highly influenced by differences in regional government quality. This influence varies by sector of economic activity and by the level of economic development of the region. The results indicate that, if the less developed regions of the EU want to engage in greater interregional trade, improving their institutional quality is a must.

Keywords: gravity model of trade; institutions; quality of government; regional policy; structural estimation; Trade (search for similar items in EconPapers)
JEL-codes: E02 F15 R10 (search for similar items in EconPapers)
Date: 2021-01
New Economics Papers: this item is included in nep-geo, nep-int, nep-mac, nep-sbm and nep-ure
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