This paper studies the intangible costs of international trade by extending the basic gravity equation with measures of … cultural and institutional distance, and institutional quality. Analyzing a sample of bilateral trade flows between 92 … countries in 1999, we find that institutional distance has a negative effect on bilateral trade, presumably because the …

We empirically examine the heterogeneity in the effects of multiple dimensions of distance on trade across detailed … product groups. Using finite mixture modeling on bilateral trade data at the 3-digit SITC level, we endogenously group product … the gravity equation. We find that institutional distance, whether countries belong to the same trade block and especially …

Ineffective institutions increase transaction costs and reduce trade. This paper shows that differences in the … effectiveness of institutions offer an explanation for the tendency of OECD countries to trade disproportionately with each other …

This paper studies the effect of institutions on trade flows, using a gravity modelapproach. We start from a standard … gravity equation that incorporates geographical proximity,language, trade policy and common history. These factors reflect the … costs of trade acrossgeographical and cultural distance. The quality of governance and the extent of familiaritywith the …

Formal trade barriers and transport costs explain only part of the resistance to international trade. Search costs on … important intangible barriers to trade. This paper proposes that the impact of institutional quality on bilateral trade varies … estimate gravity equations to investigate how trade patterns are affected by variation in the quality of institutions across …

The gravity model is the workhorse model to describe and explain variation in bilateral trade patterns. Consistent with … both Heckscher-Ohlin models and models of imperfect competition and trade, this versatile model has proven to be very … successful, explaining a large part of the variance in trade flows. However, the log-linear model cannot straightforwardly …

Investment (FDI). The conventional proximity-concentration theory suggests that FDI substitutes for trade if distance between … dimensions of distance affect exports and FDI differently. There is clear evidence of a proximity-concentration trade-off in … positive relation between import tariffs and FDI intensity provides further evidence for a trade-off resulting from trade costs …

This paper studies the importance of intangible barriers to trade in explaining variation in disaggregate international … trade. The analysis is based on a sample of 55 countries for the year 2000. We explicitly focus on the importance of … barriers for different product groups. More specifically, we find that cultural differences do not affect total trade …