Relationship-specificity, incomplete contracts, and the pattern of trade: a comment on the role of natural resources

Raúl Bajo-Buenestado

No 01/2018, NCID Working Papers from Navarra Center for International Development, University of Navarra

Abstract: In his seminal paper, (2007) finds that countries with good contract enforcement have a comparative advantage and, therefore, specialize in exporting goods for which relationship- specific investments are most important. We argue that this result cannot be extrapolated to all industries: there is substantial heterogeneity regarding the effect of contract enforcement on exports. In particular, we empirically demonstrate that there is a disconnection between judicial quality and exporting in relationship-specific natural resource related industries. Due to the lack of input factor mobility, for such industries, the quality of contract enforcement cannot explain the pattern of trade, but rather other factors that are widely discussed in the literature. We discuss some relevant implications of this disconnection between judicial quality and relationship-specific industries in terms of the natural resource curse and the impact of natural resources trade on economic development.

Keywords: Natural resources; International trade; Contract enforcement; Resource curse; Replication study (search for similar items in EconPapers)
JEL-codes: C21 F14 K12 O13 Q00 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2018-02
New Economics Papers: this item is included in nep-int and nep-law
References: Add references at CitEc
Citations:

Downloads: (external link)
http://ncid.unav.edu/en/research/working-papers/wp012018 (application/pdf)

Related works:
Journal Article: Relationship-specificity, incomplete contracts, and the pattern of trade: A comment on the role of natural resources (2018)
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:nva:unnvaa:wp01-2018

Access Statistics for this paper

More papers in NCID Working Papers from Navarra Center for International Development, University of Navarra
Bibliographic data for series maintained by ().