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 …

disaggregated bilateral trade flows around the globe. We categorise goods into three groups: fragmented, primary and other. The … how exogenous variation in countries trade patterns influences the quality of institutions. Our regressions show that … trade flows generated by fragmented and other processes of production improve rule of law, while trade flows generated by …