Openness effects on the rule of law: Size and patterns of trade

Frensch, Richard; Horváth, Roman; Huber, Stephan

doi:10.1016/j.irle.2021.106027

Cited by 4 publications

(5 citation statements)

References 41 publications

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“…Our results regarding the impact of trade openness on legal and political institutions correspond with the findings by Chan (2002), Suzuki and Gokcekus (2013), or Frensch et al (2021). Regarding the democratic accountability, our results indicate positive, however insignificant, impact.…”

Section: Impact Estimations Of Trade On Legal and Political Institutionssupporting

confidence: 90%

“…The positive but rather weak impact of trade openness on institutional quality correlates with empirical research by Rigobon and Rodrik (2004), Usman (2011), or Frensch et al (2021), although Rigobon and Rodrik (2014) estimate that trade openness is good for the rule of law but bad for democracy. We investigate this in the next section.…”

Section: Impact Estimations Of Trade On Institutional Quality Indicat...mentioning

confidence: 74%

“…Their estimated negative impact of trade on democracy is very significant, while their estimated positive impact on the rule of law is rather weak. For comparison, Frensch et al (2021) confirm the positive effect on rule of law, too, but they argue that mostly specialization on institutionally intensive exports help countries to improve it. Additionally, Rigobon and Rodrik (2004) estimate that trade openness contributes very little to the determination of institutions (less than 10 percent).…”

Section: Literature Reviewmentioning

confidence: 81%

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Does trade openness improve the quality of domestic institutions? Evidence from Africa

Němečková

Hayat

2022

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Research background: The research article deals with impacts of international trade openness on institutions in less developed economies, namely in Africa. Purpose of the article: It investigates the impacts of international trade openness on institutional quality in Africa measured by twelve various variables. Methods: It applies generalized methods of moments to a dynamic panel data of 34 African countries in the period of 1988?2012. Institutional quality data come from International Country Risk Guide, the rest from World Development Indicators and UNESCO databases. Findings & value added: Our results indicate that in the case of Africa, trade openness seems to be a positive and significant determinant of institutional quality, however, it differs across various institutional variables. Trade openness brings a positive impact on government stability, bureaucracy and law and order, we also identify its conflict-mitigating effects. This happens, unfortunately, with an exemption for natural resources exports. Trade openness also positively influences security and socioeconomic conditions, although we find the link much weaker. Regarding our control variables, we find two interesting results. First, GDP per capita has a strong and positive association with institutional quality when measured by one bundled indicator, however, individual variables show different intensities. Second, we find a strong and positive association of net foreign direct investment inflows and government stability. The added value of this research lies not only in focus on the less researched relationship, i.e., how trade impacts the institutional quality, but dominantly in focus on many institutional variables at once and comparison of their effects. Other empirical studies usually focus on selected variables only, or on selected trade items (natural resources).

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Section: Impact Estimations Of Trade On Legal and Political Institutionssupporting

confidence: 90%

Section: Impact Estimations Of Trade On Institutional Quality Indicat...mentioning

confidence: 74%

Section: Literature Reviewmentioning

confidence: 81%

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Does trade openness improve the quality of domestic institutions? Evidence from Africa

Němečková

Hayat

2022

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“…The essential peculiarity of the AEO institution is that it has been derived from general efforts on freeing trade through trade facilitation while ensuring the security of supply chains. According to Frensch, Horvath & Huber (2021), international trade may impact legal institutions in three primary channels, including overall openness to trade, a specialization on institutionally intensive exports, and a dependence on exports of natural resources, where two first channels help countries to improve the rule of law. Hence, the introduction of AEO due to its trade facilitation nature may also be associated with expectations of enhancing the rule of law in related spheres.…”

Section: The Legal Origin Concept and Aeo Statusmentioning

confidence: 99%

Legal Origins and Intersectoral Regulation of AEO Institution

Ostrikova

2022

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“…Two processes, internationalisation and globalisation, have influenced the development of the current world economy [1][2][3][4]. They have also contributed to the exchange of cultural values and the development of cultural relations between nations [5].…”

Section: Introductionmentioning

confidence: 99%

Accelerating Cultural Dimensions at International Companies in the Evidence of Internationalisation

Leonavičienė

Burinskienė

2022

Sustainability

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The research goal is to investigate whether several cross-cultural dimensions proposed in the Hofstede cultural model link international companies and their affiliations operating in Scandinavia and Baltic countries. Although cultural aspects have got much more attention in internationalisation studies over the last decade, there is still room for research focusing on such study areas. The authors start with the analysis of the literature review. Presenting the holistic approach affecting internationalisation and a list of factors necessary for internationalisation, later on, the authors present the cultural dimension of Hofstede, and then give various qualitative methods applied for studies on internationalisation. Design/Methodology/Approach: To complete the research, the authors selected the database from Nasdaq (2021), listed MNE companies from six countries: Denmark, Norway, Sweden, Estonia, Latvia and Lithuania. The mother company is located in Scandinavia, and the daughter company is in the Baltics based on FDI flows. The author’s research included 56 MNE companies from Nasdaq Baltic stock exchange. We used the correlation matrix to support the research and present the direction of identified connections to proceed with it. Findings: Obtained results revealed that there are strong links among several cultural dimensions. The results show seven positives and four negative links when discussing cross-cultural links. This finding shows that talking about intercultural relations, only four out of six Hofstede cultural dimensions have at least one strong connection operating business internationally. Originality/Value/Practical implications: The authors identified that some cross-cultural dimensions could not be analysed further because they do not have significant links. The limitations of the study and further research directions are also provided.

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Openness effects on the rule of law: Size and patterns of trade

Cited by 4 publications

References 41 publications

Does trade openness improve the quality of domestic institutions? Evidence from Africa

Does trade openness improve the quality of domestic institutions? Evidence from Africa

Legal Origins and Intersectoral Regulation of AEO Institution

Accelerating Cultural Dimensions at International Companies in the Evidence of Internationalisation

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