Suryadipta Roy

Corruption and Trade Protection: Evidence from Panel Data

This paper provides new estimates of the effects of corruption and poor institutions on trade protection. It exploits data on several measures of trade protection including import duty, international trade taxes, and the trade-GDP ratio. The paper complements the literature on the relationship between corruption and trade reform. It deviates from the previous literature in several ways. First, unobserved heterogeneity among countries have been controlled with properly specified fixed effects exploiting the time dimension present in the dataset. Secondly, instead of using tariff and non-tariff barriers, more general measures of trade protection have been used. The issue of endogeneity of corruption with respect to trade policy has been addressed using proper instruments for corruption used in previous studies. Moreover, two separate institutional measures have been used in the same regression to estimate their comparative impacts on trade policy. In general, we find that corruption and lack of contract enforcement have strong impacts to increase trade protection and negative effects on trade openness.

Trade Openness, Corruption and Factor Abundance: Evidence from a Dynamic Panel

Using the Heckscher–Ohlin–Samuelson–Vanek (HOSV) framework, this paper illustrates a relationship between corruption and the pattern of international trade that depends on the factor endowments of countries. The relationship between trade openness and corruption is empirically investigated by using a panel dataset on trade openness, corruption and capital–labor ratio, and applying estimation techniques developed for dynamic panels. The regression results provide strong support to the hypothesis that the effect of corruption on trade openness depends on relative factor abundance.

Is corruption anti-labour?

This article investigates the effect of corruption on trade openness in low-income and high-income countries. The results suggest corruption is anti-labour, since it reduces trade in low-income countries and increases trade in high-income countries.

Political Asymmetry and Common External Tariffs in a Customs Union

This paper examines the effect of political and economic asymmetries in the formation of common external tariffs (CETs) in a customs union (CU). We do so by introducing possible cross-border lobbying and by endogenizing tariff formation in a political economic model for the determination of CETs. The latter allows us to consider asymmetries among the member nations in their susceptibilities to lobbying. We also consider asymmetries in the influence of the member nations in CU-wide decision-making. A central finding of this paper is that, in the absence of economic asymmetry, the CET rises monotonically with the degree of asymmetry in country influences if the two countries are equally susceptible to lobbying. If influences are the same, the CET also rises monotonically with the degree of asymmetry in susceptibilities. These results hold irrespective of whether the lobby groups in the two member countries cooperate or work non-cooperatively.

Does time difference between countries reduce bilateral trade? An application of the correlated random effects method using panel data

ABSTRACT This article implements the correlated random effects (CRE) panel data technique in a gravity framework to analyse the effect of time difference between countries on bilateral trade. One major advantage of the CRE approach over the fixed-effects approach is that it is able to estimate the effect of variables that remain unchanged within panel clusters (e.g. time difference between countries), while these variables get dropped from regressions that use fixed-effects methods. Regression results based on the CRE Poisson pseudo-maximum likelihood estimator indicate statistically significant negative effect of time difference between countries on bilateral trade. An additional hour of time difference between countries is found to reduce bilateral merchandise exports by approximately 8%, even after controlling for the effect of distance in the regressions.

The Effects of Corruption on Trade Flows: A Disaggregated Analysis

This paper analyzes the effects of corruption on trade flows for a panel of nations. The novelty of the paper lies in our focus on trade flows at the industry level. Such a focus is important because the emerging literature on trade and institutions suggests that the pattern of comparative advantage between nations may be driven by international differences in institutions, among other factors. We find that exports of certain goods by the developed nations are negatively affected by higher domestic corruption in these nations. Interestingly, corruption in the trading partner also reduces exports of certain goods. Imports seem somewhat less vulnerable to corruption. The analysis uncovers considerable heterogeneity in the effects of corruption on different industries.