The Effect of Corruption on Exports and Imports in Latin America and the Caribbean

Abstract

International trade, in particular exports and imports, are regarded as important factors that can increase the economic development of the Latin American and Caribbean (LAC) countries. However, little is known whether the ability of these countries to strengthen their global positions in trade can be affected by the pervasiveness of local corruption. The objective of this study is to analyze the impact of corruption on exports and imports in LAC countries. Our empirical results from the gravity model indicate that local corruption strongly reduces exports in the region. Thus, we conclude that LAC would be able to achieve more export growth if corruption in the region was effectively reduced.RESUMEN. Se considera que el comercio internacional, primordialmente el ramo de las exportaciones e importaciones, son factores importantes que pueden fomentar el desarrollo econo´mico de los paı´ses de Latinoame´rica y del Caribe (LAC). No obstante, existe una inco´gnita cuanto al grado en que la habilidad de estos paı´ses en fortalecer sus posiciones comerciales globales, pueda verse afectada por la omnipresente influencia de la corrupcio´n local. Este estudio tiene por objeto analizar el impacto que la corrupcio´n ejerce sobre las exportaciones e importaciones en los paı´ses de Latinoame´rica y el Caribe. El resultado empı´rico obtenido emana de un modelo de gravedad, que indica que la corrupcio´n local reduce drásticamente las exportaciones en la regio´n. Consecuentemente, llegamos a la conclusio´n de que dichos paı´ses podrı´an aumentar aún más sus exportaciones, si se llegase realmente a restringir la corrupcio´n en la regio´n.RESUMO. O come´rcio internacional, principalmente as importações e exportações, são vistas como fatores importantes capazes de intensificar o desenvolvimento econômico dos paı´ses da Ame´rica Latina e do Caribe (ALC). No entanto, pouco se sabe se a capacidade desses paı´ses no que tange o fortalecimento de suas posições globais no come´rcio pode ser afetada pela difusão da corrupção local. O objetivo do presente estudo e´analisar o impacto da corrupção nas importações e exportações dos paı´ses da ALC. Os nossos resultados empı´ricos derivados do modelo de gravidade indicam que a corrupção local reduz muito as exportações da região. Por isso, concluı´mos que a ALC conseguiria obter um maior crescimento das exportações se a corrupção na região fosse restringida com eficácia.

Determining the economic impact of cryptocurrency adoption on international trade from a gravity model framework

“…An investigation in Africa by Musila and Sigué [7] suggests that corruption negatively correlates to international trade through a gravity model approach. In a similar study for Latin America and the Caribbean, results determine the same prediction of a negative relationship between international trade and corruption [8]. By deductive reasoning, a higher tolerance for corruption results in weak institutions to promote trade, which in turn increases the adoption of cryptocurrencies.…”

Analyzing Software Piracy from Supply and Demand Factors The Competing Roles of Corruption and Economic Wealth

“…Corruption is widely defined in the academic literature as the abuse of public power for private gain (Mauro, 1995). It is often, but not always, rooted in the national culture of a country (Husted, 1999) and it has been proposed as a major factor that hinders the development of a nation and discourages foreign and domestic investment (Charoensukmongkol & Sexton, 2011;Silva & Hirschheim, 2007). A report by BSA (2010) suggests that the majority of software piracy occurs in countries in the Central and Eastern Europe, Latin America, and Asia-Pacific regions.…”

Corrupción y Desarrollo en China y América Latina

“…Otros efectos también se encuentran en variables como inflación (Özsahin & Üçler, 2017); inversión privada (Everhart, Martínez & McNab, 2003); exportaciones (Charoensukmongkol & Sexton, 2011); empleo (Beltrán, 2016); emprendurismo (Colonnelli & Prem, 2017) de manera negativa; inversión extranjera directa, de forma positiva particularmente para el caso de Asia (Talvitie, 2017); y gasto público en ambas direcciones, dependiendo de la forma precisa de la corrupción (Wong, 2016).…”