The Multifaceted Impact of Corruption on International Trade

Susanna Thede, Nils-Åke Gustafson

Research output: Working paper/PreprintWorking paper

Abstract

The purpose of this paper is to perform a detailed examination of corruption effects on trade
based on corruption characteristics known to affect economic exchange within the corruption
research field. These characteristics are the level, prevalence, customs location, function and
predictability of corruption. The multifaceted corruption impact on trade is empirically
examined using a corruption-augmented gravity equation. The equation is estimated using a
Heckman version of a GMM instrumental variable method. Our results provide strong
evidence of that import flows vary systematically with the investigated corruption
characteristics and enable the identification of channels through which corruption affects
international trade. The empirical investigation clearly indicates the need to examine the
multifaceted role of corruption to properly assess the trade effects of corruption.
Original languageEnglish
PublisherDepartment of Economics, Lund University
Publication statusAccepted/In press - 2009

Subject classification (UKÄ)

  • Economics

Keywords

  • F10
  • K40
  • D73

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