Groot, Henri L.F. de; Linders, Gert-Jan; Rietveld, Piet; … - Tinbergen Institute - 2003
This paper studies the effect of institutions on trade flows, using a gravity model approach. We start from a standard … gravity equation that incorporates geographical proximity, language, trade policy and common history. These factors reflect …-18%. Furthermore, a better quality of formal institutions tends to coincide with more trade. An increase in regulatory quality of one …