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This paper examines the impact of trade facilitation factors on trade flows, with a particular focus on Global Value Chains (GVCs) in the agricultural and manufacturing sectors. Using the structural gravity model of international and intra-national trade and data covering the period from 2006 to 2018, we analyze the influence of maritime connectivity and cross-border trade-facilitation factors on trade in final and intermediate goods. Our findings indicate that both factors play pivotal roles in both agricultural and manufacturing subsectors’ trade. First, maritime connectivity has a heterogeneous effect on trade across sectors. It positively affects imports of final goods in textile products, basic metals, motor vehicles, and other machinery and equipment, as well as imports of intermediate inputs for fishing, rubber, machinery and equipment, and motor vehicles. Second, cross-border trade-facilitation factors have a significant influence mostly on trade of final goods in the manufacturing sector and agricultural intermediates showing also differential effects across subsectoral categories. This reveals that policies that improve maritime connectivity and reduce paperwork, time delays and transport costs promote trade integration within GVCs in the analyzed sectors. These findings underscore the sector-specific implications of trade facilitation measures and highlight the need for targeted policy interventions. [ABSTRACT FROM AUTHOR]

This study investigates the impact of corruption, corruption distance, and corruption direction on bilateral foreign direct investment (FDI) outflows using reporting OECD Global North and Global South countries. We first posit that corruption and the absolute difference in corruption levels across a pair of countries are negatively related to a host country's level of FDI. Then we investigate the moderating effect of direction when investing in a more corrupt host country. A PPML gravity model for a panel of 5733 different North and South country pairs over the years 1998–2018 indicates both the presence of corruption and a high corruption distance between country pairs has negative effects on FDI outflows, but investing in the direction of a more corrupt host country has a positive moderating effect. Our results contribute to expand and complement the theories on corruption in FDI. [ABSTRACT FROM AUTHOR]

The research delves into the effectiveness of Colombia's trade liberalisation process in boosting its exports at the industrial level. Based on an empirical workhorse approach to international trade, the gravity model, we evaluate the effect of trade openness on Colombian exports at the industrial level following the SITC4 categorisation. For this purpose, panel data on Colombian exports to all its trading partners between 2007 and 2020 were used. The results establish that Colombia's trade openness has boosted the exports of most of its industries, except for exports of the mineral fuels, lubricants and related materials group, which is a group of goods that represents the country's largest exports. Furthermore, the research also confirms the prominent impact of labour productivity in boosting Colombian exports of most product groups. Consequently, Colombian policymakers should support a re-composition of the Colombian export basket in order to take proper advantage of trade integration formulas, within a global energy transition framework. [ABSTRACT FROM AUTHOR]

This study employs the stochastic frontier gravity model (SFGM) to objectively assess the determinants of India’s rice exports from 2001 to 2019 across 22 major export destinations, highlighting untapped export potential and providing actionable policy recommendations for enhancing competitiveness in global rice markets. Results show that India's economic growth (GDP) and the GDP of importing nations positively impact rice exports. Conversely, geographical distances (representing transportation costs) and higher import tariffs act as deterrents. The devaluation of the Indian rupee positively influences export revenues. Common language benefits exports, while regional trade agreements show minimal impact. The study estimates significant untapped export potential between India and its partners, emphasizing the need for improved trade facilitation, logistics, and agreements.To maximize India's rice export potential, policymakers should prioritize quality compliance, streamline regulations, and invest in infrastructure and R&D for rice cultivars. Negotiating favorable trade agreements and implementing existing export policies like the New Agricultural Export Policy will aid market access and competitiveness. [ABSTRACT FROM AUTHOR]

An efficient and consistent logistics network, as well as a transparent facilitation mechanism of cross-border trade, are critical to the country's export competitiveness. The quality of logistics services has been identified as an important determinant of international trade. We use gravity models to assess the impact of the World Bank's Logistic Performance Index (LPI) on Pakistan's exports. The findings show that improving logistics is critical for increasing exports. Individual indicators such as reasonably priced shipments, the ability to track and trace shipments, and trade and logistical transit standards are instrumental in boosting export flows. [ABSTRACT FROM AUTHOR]

For developing economies, exporting broadens the horizon for facilitating effective integration into the global economy and improving overall competitiveness. While small developing states are particularly at high risk given their fundamental characteristics, the expected impact of these exogenous shocks on small resource dependent economies are amplified given the high possibility of lower levels of diversification. This paper therefore assesses the determinants of exports and exporting potential of SIDS (small island developing states) with a focus on Caribbean resource-based countries. Using non resource exports, in an aggregate and disaggregate form, as the dependent variable, the traditional gravity model was augmented to include a revealed comparative advantage (RCA) index, the real effective exchange rate (REER) of the exporter and the export sophistication (EXPY) index. The main findings indicate that an appreciation of the REER has an inverse impact on exports of non-resource commodities and that trade according to comparative advantage and differences in export sophistication occurs mainly in the agricultural sector. [ABSTRACT FROM AUTHOR]

We study the asymmetric effects of bilateral tariffs in FDI-receiving (destination) and FDI-sending (source) countries on bilateral FDI using Gravity analysis, with bilateral FDI and average tariff data for 47 countries during the period 2001–2012. Theory suggests that while the former would encourage tariff-jumping inward FDI, the latter would discourage offshoring and export-oriented outward FDI. Our empirical study uses two alternative methodologies to estimate a Gravity model, viz., PPML estimation method which uses pairwise, destination-time and origin-time fixed effects, and GMM with time fixed effects, which can deal with possible two-way causality. After correcting for possible two-way causality, our study confirms the theoretical expectations. We also find that the 2008 Financial Crisis has had a significant impact on the magnitude of the effects of bilateral tariffs. We find that one percentage-point increase in tariffs in the destination country increases inward FDI stock to GDP ratio in that country by 0.06% in the non-crisis years and by 0.01% in the crisis years. Similarly, one percentage-point increase in tariffs in the origin country decreases outward FDI stock to GDP ratio from that country by 0.06% in the non-crisis years and by 0.02% in the crisis years. [ABSTRACT FROM AUTHOR]

This paper estimates the dimensional and dynamic trade effects of monetary integration in the African Franc Zone. We consider the 14 CAEMC and WEAMU countries and their bilateral trading partners over the period 1995–2019. On the basis of an augmented gravity model, the results show the existence of heterogeneous effects, the first being dimensional and the second time-related. In other words, while monetary integration has a positive and significant average effect, a refined analysis shows that not only have some countries experienced losses and others gains, but also, the time-related effects have not been uniform. However, when considering the Franc Zone as a consolidated entity, absolute trade losses disappear. Finally, the application of a non-parametric approach reveals the existence of economies of scale for low trade intensities. Based on these results, we propose a set of policies conducive to the implementation of resilience mechanisms in the event of exogenous shocks and to an ambitious reform of the monetary structure of the Franc Zone as a whole. [ABSTRACT FROM AUTHOR]

Using a rich and updated dataset on the Global Sanction Data Base (Felbermayr et al. "The Global Sanctions Data Base," European Economic Review 2020; 129: 1–23), this study examines the effect of sanctions on FDI flows across 1,717 pairs of 66 countries during the 2000–2012 period and the role played by international linkages such as global value chains and global bank linkages in the sanction-FDI nexus. Results from the gravity model show that sanctions indeed have heterogenous effects on FDI flows when separate types of sanctions are put into consideration. They significantly reduce FDI flows in the pre- and during the crisis period. Both global value chains (GVCs) and global bank linkages (GBLs) play a moderating role in the sanction-FDI nexus, where the consequences of sanctions on FDI flows become more severe in the presence of these two types of international linkages. It is also found that GVCs signify the negative impacts of trade sanctions, while the GBLs can be regarded as a channel through which financial sanctions affect FDI flows more significantly. These findings bridge two strands of literature on sanctions and international linkages, where the latter is on the rise due to the worldwide presence of multinational corporations' activities and the globalization of the financial markets. [ABSTRACT FROM AUTHOR]

Based on the trade data of digitizable products exported by China to the 65 'Belt and Road' countries from 1998 to 2018, this study adopts the extended trade gravity model to analyze the impact of ICT on the country's exports of these products. The empirical results show that ICT has a significant and positive effect on the development of trade of digitizable products and it also promotes China's exports by lowering trade costs and accelerating innovation. The paper provides new evidence on information and technology's impact and influential mechanisms with regard to new trade patterns. [ABSTRACT FROM AUTHOR]

Without accounting for the period 2008–2009, the evolution of Spanish exports from 2001 to 2015 was marked by constant growth. This period includes an economic recession in Spain from 2008 to 2013, which was accompanied by important credit restrictions to the private sector. This environment pushed Spanish firms abroad for survival, affecting the geographical mapping of exports. With this study, we examined the role played by the degree of financial development in destination countries, and by the export credit guarantees issued by CESCE, the Spanish export credit agency (ECA) in the evolution of such exports. Following previous studies, we proxied the financial development in the destination countries and used CESCE's new business underwritten on exports between Spain and 161 destination countries. We applied a modified gravity model and a System GMM estimator to show that the effects of the financial development in the destination countries on Spanish exports differed by regions and by periods, becoming statistically non-significant during the period of higher financial stress in Spain. Our results also provide evidence that CESCE behaved countercyclically during this period and contributed to the geographical diversification of Spanish exports. [ABSTRACT FROM AUTHOR]

We estimate an augmented gravity model using a firm-level database on Turkish firms to revisit the trade-exchange rate relationship over 2003–2015 at the intensive export margin. Besides several additional layers of analysis made possible by unique attributes of our firm-level database, we also examine exchange rate effects separately for firms engaged in manufacturing and services-intensive activities, which differentiates us from existing literature. A depreciation of the Lira is found to be associated with an increase in the quantity of Turkish exports, irrespective of firm ownership or size, though the effect is found to be muted for manufacturing firms in the sample that are more reliant on imported intermediates. Meanwhile, exchange rate volatility is found to be adversely associated with firm-level exports, especially for the sample of services-intensive and foreign-owned firms, irrespective of whether the Lira appreciated or depreciated. Finally, while the results display significant heterogeneity across sectors, at the regional level, they are driven by the location of production/export hubs in Turkey, namely İstanbul in Marmara, Ankara in Central Anatolia and İzmir in Aegean. [ABSTRACT FROM AUTHOR]

The present paper applies a modified gravity model to examine the relationship between global economic sanctions (GES) and global value chains (GVC) by using a dyad panel dataset of 38 developed and 28 developing countries during the 2005–2015 period and the rich and updated database of the Global Sanction Database version 2 (Felbermayr, G., A. Kirilakha, C. Syropoulos, E. Yalcin, and Y. V. Yotov. 2020. "The Global Sanctions Data Base." European Economic Review 129: 1–23. doi:; Kirilakha, A., G. Felbermayr, C. Syropoulos, E. Yalcin, and Y. V. Yotov. 2021. The Global Sanctions Data Base: An update that includes the years of the Trump presidency. The Research Handbook on Economic Sanctions, Edited by Peter AG van Bergeijk.). GVC participation is classified into the source of the value-added as incorporated in exports, looking both backward and forward from the view of a reference country. With distinct econometric techniques and empirical estimation strategies, our empirical results document a negative association between GESs and GVC, including backward and forward linkages. This marginal effect of sanction on backward GVC is more sizable than those on forward GVC. Furthermore, the GES-GVC nexus is only evident in the case of developing countries, while the effects of sanctions are found to be small or statistically insignificant in the developed countries. However, these marginal effects of sanctions become less sizable if the target country develops a well-developed institutional system. [ABSTRACT FROM AUTHOR]

This paper investigates whether new donors use foreign aid to facilitate their integration in the world economy. With this aim, the effect of foreign aid on gross trade and global value chains (GVC) is estimated for a sample of 12 new donors and 130 recipients over the period from 2000 to 2014. The results from a theoretically justified gravity model show that the aid effects are heterogeneous across donors and, although weak in the short run for GVC, they are however sizable in the long run. Foreign aid has a positive impact on gross trade for all donors, but only for some of them on the length of GVC. In particular, aid provided by Czech Republic, Hungary, Poland, Korea, Thailand and Turkey fosters the two forms of internationalization, whereas aid given by Russia and Israel only affects gross exports. Surprisingly, the magnitude of the aid effects is smaller for China than for other donors. [ABSTRACT FROM AUTHOR]

Using an extended gravity model that corrects for zero trade, endogeneity and heterogeneity, we empirically investigate whether regional trade agreements (RTAs) promote trade. The model was estimated using a comprehensive panel dataset of the East African Community (EAC) from 1990 to 2017 and applying the Poisson Pseudo-Maximum Likelihood estimator. Empirical results show that RTAs have enhanced trade within the EAC regional bloc, but the impact varied across countries and sectors. We find that RTAs have led to an increase in imports from and exports to non-bloc countries, and this impact persists after 12 years. Our empirical findings are robust to alternative model specifications. Exploiting RTAs policy implication, this paper provides new empirical evidence highlighting that promoting RTAs could promote trade in the East African Community. [ABSTRACT FROM AUTHOR]

The present study examines the effect of institutions on the location choice of foreign direct investment (FDI) using a novel dataset for bilateral FDI of India. My study follows prior works to argue that institutions have a positive association with FDI. The study considers three widely used institutional pillars namely state judiciary system, bureaucracy system, and property right protection to examine the effect of institutions on location choice of FDI. The study extends prior works focusing on the influence of firms' heterogeneity on the connection between institutions and FDI using the gravity model. The study finds that institutions have a significant and positive impact on the location choice of FDI. The results reveal that institution of developed regions is positively associated with FDI. But surprisingly, there is a negative association between institutions of the developing region and FDI. I put the firms into four separate bins according to their size to capture the firms' heterogeneity. Results show that large-sized firms are more likely to invest in countries with good institutions. [ABSTRACT FROM AUTHOR]

In this paper we examine to what extent developing countries export more as a result of having the official Least Developed Country (LDC) status. We estimate a gravity model of trade over the period 1973–2013, in which identification is achieved by exploiting the particularities and asymmetries of 'inclusion' and 'graduation' criteria of LDC status. As mechanisms through which LDCs might benefit, we evaluate the effectiveness of individual trade preference schemes for LDCs of the European Union, United States, Canada, Japan, Australia, New Zealand, Norway, and Turkey and the impact of LDC status on exports. We find that first, individual trade preference regimes are not always beneficial in terms of increased export values. Export promoting effects are found for the individual schemes of some developed countries and some sectors. Second, a country's official designation as a LDC is associated with higher aggregated exports. This is particularly the case for LDCs that export agricultural goods and light manufacturing products, including textiles and leather after 1990. Third, the positive effect of LDC status is significant and sizable even when controlling for specific trade preference schemes suggesting that there are other benefits of LDC status that play a role in promoting exports. [ABSTRACT FROM AUTHOR]

When the United Arab Emirates (UAE) started exporting oil in 1962, it leveraged off the country's economy to emerge as one of the world's fastest-growing nations. Recently, however, worries about the vulnerability of the economy from shocks in international oil prices have effectuated a rapid transformation based on production and trade diversification. Trade agreements and liberalization policies turned the country into a regional trade hub. Given the recent changes in the economy's structure and the importance of trade for the UAE economy, we examine opportunities for the country to further expand trade. We use a gravity equation on 2002–2016 panel data and a Poisson pseudo maximum likelihood estimator to examine the determinants of trade and the trade potential. We compare the results obtained from a theory-consistent econometric approach for the estimation of gravity with the results obtained from past 'intuitive' approaches to gravity estimation and infer on the bias present. Results reveal that the UAE has exhausted trade potential with some of its major trading partners including many member countries of the GCC and PAFTA. However, potential for trade expansion exists with many other countries, including Japan and India that could dictate future policy efforts for trade expansion. [ABSTRACT FROM AUTHOR]

The COMESA-EAC-SADC Tripartite FTA, formed in 2011, is supposed to be a milestone towards Africa's continental trade integration. This study analyzes the impact of regional integration among the Tripartite countries on their bilateral imports before that date to evaluate the latest integration efforts. We estimate an extended gravity model on a large panel of 51 African countries using yearly observations from 1995 to 2010. We proxy existing formal trade barriers by sample average tariff data on imports from the world as well as indicator variables for the membership in regional FTAs. We consider different estimation techniques and discuss distinct sets of fixed effects. The PPML regression results indicate that remaining tariffs are significantly negatively correlated with imports throughout the preferred multiplicative models. An FTA status does not show a clear-cut import enhancing effect. In the specifications that control for country-year effects, the EAC coefficient is positively correlated with imports, and the COMESA and SADC FTA membership show a positive relation to imports within some reduced-sample robustness checks. [ABSTRACT FROM AUTHOR]

We find evidence of pervasive tariff evasion in the global data on trade from 1988 to 2015. Using over 35 million observations of data on import and export flows at the HS6 product category level, we find evidence of substantial underreporting of imports relative to export data on average and particularly when tariffs on product categories are high. These effects are stronger in more corrupt destination countries, as measured by the World Bank's Worldwide Governance Indicators [World Bank. 2016. Worldwide Governance Indicators. September 25, 2016]. In addition, evidence of tariff evasion increases significantly in economic downturns. We document these patterns in the global data and explore the welfare effects of this evasion by (1) putting a lower bound on the extent to which there are revenue losses from tariff evasion, and by (2) estimating the effects of corruption as measured by this indicator on global trade in a simple gravity model. We estimate that in total, revenue losses from tariff evasion are currently likely to exceed 400 to 670 million USD globally per year, and find that the effects of corruption on trade flows are ambiguous overall but change from weakly positive ('grease the wheels') to largely negative over the years in our sample. [ABSTRACT FROM AUTHOR]

This paper analyzes the Turkish export and import flows with regard to regional clusters (RCs) and bilateral trade costs (BTCs) by using a panel data gravity model. We study the role of RCs and BTCs in two complementary parts: in the first part, we use an unbalanced panel data for 180 countries over the period 1960–2012, compiled from the DOTS database. We extend these estimations by running the data at four different time intervals, each representing different economic or political regimes in Turkey. In the second part, we repeat the same exercise at sectoral level for 176 countries over the period 1994–2010, using the BACI database. Aggregate estimates show that the gravity model is very effective in explaining the export and import flows of Turkey and that all close-by regions, including EU27, have a significant impact on trade flows of Turkey. We also find that the EU Customs Union has a negative effect on Turkish exports and a positive effect on imports. Estimates at selected time intervals reinforce aggregate estimates and sectoral level analyses indicate that while some regions contribute positively in all or the majority of sectors, others contribute negatively or produce mixed results. [ABSTRACT FROM PUBLISHER]

The most important and imperative objective of the developing nations is rapid economic growth and exports are generally considered as an engine for economic growth. Being an agro-based economy, agriculture exports play pivotal role not only in economic growth but also in socioeconomic uplifting. This study aims at evaluating main determinants of agricultural exports of Pakistan by applying stochastic frontier gravity model over the period of 1995–2014 for a sample of 63 countries. In addition, the study also analyzes whether there is any untapped export potential between Pakistan and the trading partners in agriculture sector. The results confirm the consistency of gravity model for agriculture exports of Pakistan. Likewise, the estimates also point out that bilateral exchange as well as tariff rates also effect agriculture exports. The study has also incorporated the effect of common border, common culture, colonial history and preferential trading agreements by including their respective dummies. The study confirms the significance of each factor, except common language, with their respective magnitude. Moreover, technical efficiency estimates reveal that Pakistan has great export potential with neighboring, Middle Eastern and European countries. [ABSTRACT FROM PUBLISHER]

This paper derives and compares two competing-destinations formulation of the gravity model applied to trade in intermediates. We build a probabilistic input demand function from entropy maximization in which firms may purchase some of their inputs from other firms paying the required transport costs and accounting for the spatial structure of trading partners in a geographical system. In the second model, firms trade inputs to reduce the overall cost of production and intermediate sales are encouraged by low distance costs and low competition from alternative input sources. Even if the gravity equations look similar, we show that their underlying structures are different, and that the type of gravity equation has significant implications for the estimation technique adopted. [ABSTRACT FROM PUBLISHER]

Two main shortcomings flaw the estimation of gravity model in previous studies that examined the trade-creating effects of African Regional Trade Agreements (RTAs). First, these studies fail to account for the multilateral resistance term. This omission makes the estimates from standard gravity model bias and inconsistent. Second, there is a significant proportion of zero trade flows, however, these studies also fail to account for them properly. They use either the Tobit model or replace zero flows with arbitrary small values. Apart from these problems, they also exhibit considerable heterogeneity in the RTA effects on trade. In this paper, a meta-analysis of previous empirical studies is conducted to derive a combined effect size and also to explain the heterogeneity. In addition, I use the gravity model to compare the trade-creating effect of the main African RTAs. Using the gravity model, I compare the estimation methods of previous studies to the Poisson pseudo-maximum-likelihood estimator that tackles the zero flows. From the meta-analysis, I find a general positive effect of African RTAs of about 27%–32%. A comparative assessment of the RTAs using gravity model shows a striking heterogeneity. [ABSTRACT FROM AUTHOR]

The paper analyzes the effects of four regional integration agreements (Common Market of the South [MERCOSUR], Andean Community [ANCOM], Central American Common Market [CACM] and North America Free Trade Agreement [NAFTA]) on bilateral trade in 19 countries from the Western Hemisphere for the period 1970–2014. For this purpose we estimate different gravity models to control for trade creation and diversion, export diversification and intra-industry trade using OLS log-linearized gravity model and Poisson pseudo-maximum-likelihood panel data estimators that allow controlling for zero-value trade flows. We find trade creation for ANCOM, MERCOSUR and CACM and trade diversion for NAFTA and MERCOSUR countries. Export diversification negatively affects bilateral trade in all American agreements, while intra-industry trade has contributed to trade expansion in ANCOM and the opposite for NAFTA, MERCOSUR and CACM. Global supply chains may help us explain these results. Finally, we find anticipatory effects on trade several years before the signing of the agreements, but only NAFTA countries seem to be natural trading partners in the region while the rest of Latin American regional agreements have not resulted in a comprehensive, profound and consolidated common market. [ABSTRACT FROM AUTHOR]

The article empirically tests the link between financial constraints with the extensive (proportion of exporters) and the intensive (volume of exports) margins of international trade. The main contribution is the macroeconomic analysis of this relationship – i.e. the investigation of the effect of finance on trade of all economic sectors combined – which is further reaching than the manufactured-sector-based focus found in the current literature. The study is developed on the basis of a bilateral trade database on 104 countries between 1998 and 2007. The empirical section estimates a two-stage gravity equation using panel data and shows a positive impact of financial development on the marginal variation of the extensive margin. However, the estimate of the relationship between finance and the intensive margin shows an unexpected result. It finds inconsistent results demonstrating a relationship that is negative, positive or statistically null. [ABSTRACT FROM PUBLISHER]

This paper estimates the effect of the Internet on promoting international trade. The Internet can reduce the information cost for traders. We study the effect of the Internet on trade by augmenting the gravity equation with the Internet. The empirical results show that a 10% increase in the Internet users increases international trade by 0.2%–0.4%. The results are not sensitive to circumstances such as adding time-varying country fixed effects into the gravity and controlling for infrastructure measures. The results do not seem to be resulting from some small subset of the data and the results are robust to considering zero trade flows. Furthermore, our results are not driven by the time series variation of the panel data either. To address the endogeneity issue, we use the civil liberty index from the Freedom House as an instrument, system-GMM (generalized method of moments) approach and heteroskedasticity identification strategy, and the results still show strong effect of the Internet on trade improvement. [ABSTRACT FROM PUBLISHER]

Since the early 1990s, the world has seen a proliferation of free trade agreements (FTAs). A major goal of free trade is to develop trade between its signatories. The gravity model is used to analyze the bilateral trade data against the variables of the relative size of the pair of countries involved in trade, distance, common border and language and dummies for each of the FTAs. This article focuses on the studying of the influence of the FTAs in the Mediterranean countries in which we integrate the role of the regional dummy EU-15, Economic and Monetary Union (eurozone), the Arab Maghreb Union and AGADIR Agreement (FTA between Jordan, Egypt, Tunisia and Morocco) in trade flows. In addition, this work aims to detect the impact of the global financial crisis on export flows between the FTAs in the Mediterranean region. The use of regional variables in gravity models designed to determine whether the FTAs contribute to the creation or trade diversion. This study examines a cross section and panel (static and dynamic) of 27 countries for 1980–2011. The results show the existence of a strong relationship between the factors of FTAs and trade flows. [ABSTRACT FROM PUBLISHER]

The objective of this article is to analyse trade flows in emerging nations with a maritime boundary, where trade facilitation plays a decisive role in their international development. In order to detect possible patterns in performance, we apply the economic approach of gravity models using the World Bank Logistic Performance Index (LPI) as a good proxy of trade facilitation. The results of the estimation lead to the conclusion that the more complex the transportation of goods is, the more influential the logistics indicator, trade facilitation being most prominent in Middle East exporters. [ABSTRACT FROM AUTHOR]

Economic theory indicates some ambiguity in the relationship between intellectual property rights (IPRs) and trade. Here, we extend the empirical literature that attempts to resolve this ambiguity by examining how IPRs affect trade along both the intensive – increasing volume of existing goods – and extensive – increasing variety of goods – margins oftrade. Our main results suggest that IPRs have a positive impact on imports, which is driven by a positive effect on the extensive margin and a negative impact on the intensive margin. Splitting countries according to their level of development, market size and imitative ability, we find that the positive impact of IPRs is strongest in less-developed countries, as well as larger countries and those with a higher degree of imitative ability. [ABSTRACT FROM PUBLISHER]

Motivated by the debate in the trade liberalization and the environment literature, this article examines the effect of enhancing green productivity (GP) on bilateral trade flows. The uptake of per capita ISO14001 certification counts is used to measure GP. The existing literature provides other key determinants of bilateral trade flows. This article employs an augmented gravity model and presents panel data analysis on 26 countries from 1995–2004. Since GP is closely related to quality management, this article also examines the joint effect of the measure of quality management systems (QMS) and the measure of GP. Several fixed effects regression equations are estimated. The results support the hypothesis that enhancing green productivity is a positive and statistically significant determinant of real bilateral exports. The joint significance of the measures of GP and QMS is also supported. This article lends empirical support for the new trade theory and Linder's hypothesis and is consistent with those obtained in the existing literature. [ABSTRACT FROM AUTHOR]