Should Bangladesh Export to Countries with Better Institutional or Comparatively Similar Institutional Form?

摘要

Using panel data for the years 2006-2015, this study empirically investigates the effect of rule of law as an institution on Bangladesh's exports to 28 European Union countries (EU28) based on gravity model analysis. Two-step econometric results suggest that institutional rule of law is strongly associated with Bangladesh's exports, and institutional quality provides evidence of this significant effect. Furthermore, exports of Bangladesh are driven by economic size, market size, and the real exchange rate as well as rule of law. These results are suggestive of an important joint role for both trade and institutions in the long run.