Institutional quality as a barrier to trade

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Abstract

Improvement of institutional quality abroad encourages new domestic firms to export to these countries, but has no effect on the volume of exports from incumbent firms. Thus, poor institutional quality acts as a barrier to the extensive margin of trade. As a result, policies that encourage the strengthening of foreign institutions coincide with national export initiatives such as the one launched by President Obama in 2010.

Original languageEnglish
Pages (from-to)1453-1458
Number of pages6
JournalApplied Economics Letters
Volume20
Issue number16
DOIs
Publication statusPublished - 2013

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All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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