How the nexus among the free trade, institutional quality and economic growth ffect the trade from ASEAN countries

Abstract

The main purpose of the study is to answer the research question that How the nexus among the free trade, institutional quality and economic growth effect the trade from ASEAN countries. The exports become uncompetitive because of such hidden tax and high production costs in ASEAN. It can be said that importer/importers can achieve competitive advantage by being involve in corrupt activities as compared to others who are not willing to give bribes. The trade can be enhanced or hindered through corruption based on the willingness of firms in the exporting countries to offer bribes at a competitive level. Precisely, the focus of the discussion is on the channels through which global trade can be influenced. This shows that the main influence of corruption, which is an institutional quality on the global trade, is an issue to be empirically investigated. Considering this notion, the previous knowledge has been extended by including some other variables of institutional quality such as good governance, instability of governance and corruption by keeping the focus on flow of trade in ASEAN. Moreover, the data is allowed to decide whether the variables of institutional quality i.e. instability of government, corruption and good governance influence the trade across the border in a positive or negative way in the ASEAN countries. The findings of the study have provided support to the hypothesized results.

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