Work

The Effect of Financial Development, Tariff, and RTA on Exports: A Structural Gravity Analysis

Year: 2024

Type: article

Abstract: This paper examines the effect of financial development (FD), tariffs, and RTA on bilateral exports in a structural gravity framework. Applying high-dimensional fixed effects in OLS and PPML estimation technique in a panel framework covering 169 countries over 2001-2017, this paper finds that FD of both exporters and importers are an important determinant for boosting exports. The EIA has the most trade creation effect than any other form of RTA. Importers' FD has a larger effect on bilateral exports for developed to developed and developed and developing country trade than that of the exporters. The trade between developing to developing countries is positively affected by both exporters' and importers' FD; and negatively to a larger extent by tariff measures. However, in the case of developing and developed country estimation, FD of the exporter country is significantly affecting bilateral trade. Tariffs significantly distort trade, largely between developing and developed countries.

Source: Journal of Economic Integration

DOI: 10.11130/jei.2024007

Authors: Syed Nazrul Islam, Md. Shariful Islam, Md. Rayhanul Islam, Md. Ashraful Alam

Institutions: Bangladesh Bank, Bangladesh University of Professionals

Language: English

Topic: Global trade and economics

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: diamond

OpenAlex ID: W4392324489