Corruption and Bilateral Trade Flows: Extortion or Evasion?

Dutt, Pushan; Traça, Daniel

doi:10.2139/ssrn.992399

Cited by 59 publications

(88 citation statements)

References 46 publications

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“…This conclusion is based on the fact that the interaction terms are almost identical with the trade regulation variable (with single correlation coefficients of approximately 0.99). This is true for both of the interaction terms identified by Dutt and Traca (2010), and we can thereby provide no evidence confirming their results. Instead, these interaction terms are excluded from the estimations because of their high correlation with the importing country's applied ad valorem tariff equivalent.…”

contrasting

confidence: 71%

“…Customs officials who use their power to collect bribes may create an opportunity to avoid the enforcement of trade regulation, which can enhance trade compared to uncorrupt customs processing. Dutt and Traca (2010) show that this trade-enhancing effect can prevail when tariffs are high and provide evidence that it can be found in a small share of their trade observations. This non-linear effect is taken into account in our empirical investigation.…”

Section: The Corruption Impact On International Economic Exchangementioning

confidence: 77%

“…We furthermore examine the effects of extending the gravity equation to incorporate the combined trade effects of corruption and trade regulation from Dutt and Traca (2010). These effects are captured by interaction variables including a linear and quadratic corruption term.…”

Section: Empirical Specificationmentioning

confidence: 99%

“…In examining our constructed corruption and trade regulation interaction variables, it is clear that these carry no additional explanatory power when 16 In comparison, Dutt and Traca (2010) use aggregate national corruption indices in their investigation. 17 The corruption data were collected between the end of 1998 and the beginning of 2000.…”

Section: Empirical Specificationmentioning

confidence: 99%

See 3 more Smart Citations

The Multifaceted Impact of Corruption on International Trade

Thede

Gustafson

2012

World Economy

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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.

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contrasting

confidence: 71%

Section: The Corruption Impact On International Economic Exchangementioning

confidence: 77%

Section: Empirical Specificationmentioning

confidence: 99%

Section: Empirical Specificationmentioning

confidence: 99%

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The Multifaceted Impact of Corruption on International Trade

Thede

Gustafson

2012

World Economy

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“…Weapon makers in corrupt countries export to areas of civil conflicts despite arms embargoes (DellaVigna and La Ferrara 2010). More generally, Dutt and Traca (2010) show that when tariffs are high, bribes grease the wheels of commerce.…”

Section: Introductionmentioning

confidence: 99%

Quota‐hopping In‐bond Diversion

Rotunno

Vézina

2014

Economic Inquiry

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We show that the U.S. in-bond system of imports may be used by firms to illegally avoid trade barriers, a practice known as in-bond diversion. The illicit scheme involves declaring Chinese exports bound for Mexico but diverting them to the U.S. market while in transit, thus creating a gap between Chinese and Mexican reports. Using the phaseout and removal of U.S. quotas at the end of the Multifiber Agreement as a policy experiment, as well as variation in quota bindingness across products, we show that quota-bound products were associated with larger trade gaps which shrunk following the quota removals. (JEL F13, O17, O19) * We are grateful to Richard Baldwin, Beata Javorcik, Peter Neary, Kevin O'Rourke, Tony Venables, and seminar participants at Oxford, Geneva, and the ETSG Conference in Birmingham for many constructive comments. We are particularly indebted to Bruce Blonigen (Co-Editor) and referees.

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Illegal trade in natural resources: Evidence from missing exports

Vézina

2015

International Economics

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Countries restrict the export of natural resources to lower domestic prices, stimulate downstream industries, earn rents on international markets, or on environmental grounds. This paper provides empirical evidence of evasion of such export barriers. Using tools from the illicit trade literature, I show that exports of minerals, metals, or wood products are more likely to be missing from the exporter's statistics if they face export barriers such as prohibitions or taxes. Furthermore, I show that this relationship is significantly higher in countries with high levels of corruption and bribes at customs. The results have implications for the design of trade policies and environmental protection.

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Corruption and Bilateral Trade Flows: Extortion or Evasion?

Cited by 59 publications

References 46 publications

The Multifaceted Impact of Corruption on International Trade

The Multifaceted Impact of Corruption on International Trade

Quota‐hopping In‐bond Diversion

Illegal trade in natural resources: Evidence from missing exports

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