Institutions and International Trade Linkages: an Investigation With Panel Data Analysis on Transition Economies

Abstract

The purpose of the paper is to analyze the impact of governance indicator as a measure of institutional quality on international trade over transitions economies for the period 1996-2016. The relationship between institutions and exports and total international trade has been evaluated according to cointegration tests with and without structural breaks. As a result of the empirical analysis, cointegration relationship is determined between the variables in tests that did not consider structural breaks. When the relationship of the exports of goods with the governance indicators is analyzed by CCE and the Baltic countries and the CIS separately, a significant positive relation is found between the export level of goods and the governance indicators of CEE and Baltic States.