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- PublicationDoes Trade Foster Institutions?The field of institutional economics stresses the role of institutions as a possibledeterminant of many economic phenomena (see among many others North, 1990). On the other hand, recent contributions suggest that economicfeatures may determine the development of a country’s institutional setting(Acemoglu and Robinson, 2006). Therefore, the issue of the endogeneity of institutions is well known and widely debated whenever a causal relationship between economic variables and institutions is suggested.
- PublicationDoes Trade Foster Institutions? An Empirical AssessmentThe relationship between trade and institutions has been extensively debated by trade economists and political scientists. The aim of the present paper is to provide some empirical evidence on the causal relationship between institutions and trade flows in a panel framework. We present a Granger causality test (1969) as well as a Hurlin and Venet (2001) test for panel data using a bilateral trade flows panel that covers 29 years. The issue of zero flows of trade is handled by using a panel Poisson Pseudo-Maximum Likelihood estimator.