THE MEDIATING ROLE OF EASE OF DOING BUSINESS IN PUBLIC GOVERNANCE AND INTERNATIONAL TRADE
Article Sidebar
Published:
2019-04-18
Keywords:
nternational Trade, Governance, Ease of Doing Business, Mediating Role, SEM-PLS
Main Article Content
Abstract
The purpose of the study is to investigate the mediating role of ease of doing business in the relationship of public governance and international trade. A sample of 150 countries and Structural equation model with partial least Square method was used to test the hypotheses. A full mediation was evident from the study, where governance has an indirect effect on trade, which fully mediated by ease of doing business.
Article Details
Section
References
Abdella, A. B. (2018). The effect of corruption, trade openness and political stability on foreign direct investment: Empirical evidence from BRIC countries. International Journal of Advanced and Applied Sciences, 5(3), 32-38.
Abeyasinghe, R. (2004). Democracy, Political stability, and Developing Country Growth:Theory and Evidence. Illinois: Illinois Wesleyan University.
Ali, M. S. (2015). Does Corruption Impede International Trade?New evidence from The EU and the MENA Countries. Journal of Economic Cooperation and Development, 36(4), 107-120.
Ãlvarez I. C., B. J. (2018). Does Institutional Quality Matter for Trade? Institutional Conditions in a Sectoral Trade Framework. World Development, 72-87.
Anderson, J. E. (2002). INSECURITY AND THE PATTERN OF TRADE: AN EMPIRICAL INVESTIGATION. The Review of Economics and Statistics, 342-352.
Anderson, J. E., & Marcouiller, D. (2002). Insecurity And The Pattern of Trade: An Empirical Investigation. The Review of Economics and Statistics, 342-352.
Ani, T. G. (2015). Effect of ease of doing Business to Economic growth among Selected Countries in Asia. Asia Pacific journal of multidisciplinary research, 3(5), 139-145.
Berden, K., Bergstrand, J. H., & Van Etten, E. (2014). Governance and globalisation. The World Economy, 37(3), 353-386.
Branstetter, L., Lima, F., Taylor, L. J., & Venâncio, A. (2013). Do entry regulations deter entrepreneurship and job creation? Evidence from recent reforms in Portugal. The Economic Journal, 124(577), 805-832.
Bussmann, M. S. (2006). Trade Liberalization and Political Instability in Developing Countries. Programming for Peace (pp. 49-70). Dordrecht: Springer.
C., Ã. I., Barbero, J., Pose, A. R., & ZofÃo, J. L. (2018). Does Institutional Quality Matter for Trade? Institutional Conditions in a Sectoral Trade Framework. World Development, 72-87.
Cenfetelli, R. T., & Bassellier, G. (2009). Interpretation of formative measurement in information systems research. Mis Quarterly, 689-707.
Chin, W. W. (1998). The partial least squares approach for structural equation modeling. Modern methods for business research, 295-336.
Christophersen, T., & Konradt, U. (2006). The development of a formative and a reflective scale for the assessment of on-line store usability. Journnal of Systematics, Cybernetics and Informatics, 20.
Corcoran, A., & Gillanders, R. (2015). Foreign direct investment and the ease of doing business. Review of World Economics,, 151(1), 103-126.
Damania, R. P. (2003). Trade liberalization, corruption, and environmental policy formation: theory and evidence. Journal of Environmental Economics and Management, 490-512.
Daskalakis, S., & Mantas, J. (2008). Evaluating the impact of a service-oriented framework for healthcare interoperability. eHealth beyond the horizon - get IT there: Proceedings of MIE2008 (Studies in Health Technology and Informatics). (pp. 285-190). Amsterdam, Netherlands: IOS Press.
de Sá Porto, P. C., Canuto, O., & Morini, C. (2015). The impacts of trade facilitation measures on international trade flows. The World Bank.
Dennis, A., & Shepherd, B. (2011). Trade facilitation and export diversification. The World Economy, 34(1), 101-122.
Di Giovanni, J., & Levchenko, A. A. (2013). Firm entry, trade, and welfare in Zipf's world. Journal of International Economics, 89(2), 283-296.
Evdokia, M., Orliac, T., & Minor, p. (2011). Trade facilitation indicators: The impact on trade costs. OECD Trade Policy Papers 118, OECD Publishing. Retrieved from http://econpapers.repec.org/paper/oectraaab/118-en.htm
Feenstra, R. C., & Ma, H. (2014). Trade facilitation and the extensive margin of exports. . The Japanese Economic Review, 65(2), 158-177.
Freund, C., & Bolaky, B. (2008). Trade, regulations, and income. Journal of development economics, 87(2), 309-321.
Garson, G. D. (2016). PARTIAL LEAST SQUARES (PLS-SEM):Regression and Structural Equation Models. North Carolina: Statistical Publishing Associates.
Gold, A. H., Malhotra, A., & Segars, A. H. (2001). Knowledge management: An organizational capabilities perspective. Journal of Management Information Systems, 185-214.
Grechyna, D. (2017). Trade Openness and Political Distortions.
Groot, H. L. (2003). The Institutional Determinants of Bilateral Trade Patterns. Tinbergen Institute.
Groot, H. L., Linders, M. G., & Rietveld, P. (2005). Institutions, Governance and International Trade:Opening the Black Box of OECD and GDP Per Capita Effects in Gravity Equations. IATSS Research, 29(2), 22-29.
Hair, J. F., Ringle, C. M., & Sarstedt, M. (2017). A primer on partial least squares structural equation modeling (PLS-SEM). Thousand Oaks, CA: Sage.
Hao, X., Lynch, J. G., & Chen, Q. (2010). Reconsidering Baron and Kenny: Myths and Truths About Mediation Analysis. Journal of Consumer Research, 37(2), 197–206.
Henseler, J., & Ringle, C. M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 115-135.
Henseler, J., Hubona, G., & Ray, P. A. (2018). Partial least squares path modeling: Updated guidelines. In H. Latan & R. Noonan (Eds.), Partial least squares structural equation modeling:Basic concepts, methodological issues and applications. New York: Springer.
Henseler, J., Ringle, C. M., & Sarstedt, M. (2012). Using partial least squares path modeling in international advertising research: Basic concepts and recent issues. Handbook of research on international advertising, 252-276.
Höck, C. R. (2010). Management of multi-purpose stadiums: Importance and performance measurement of service interfaces. International Journal of Services Technology and Management, 188-207.
Höck, M. &. (2006). Strategic networks in the software industry: An empirical analysis of the value continuum. IFSAM VIIIth World Congress. Berlin. Retrieved from http://www.ibl-unihh.de/IFSAM06.pdf.
Hu, L. T., & Bentler, P. M. (1998). Fit indices in covariance structure modeling: Sensitivity to underparameterized model misspecification. Psychological methods, 424.
Jovanovic, B., & Jovanovic, B. (2018). Ease of doing business and FDI in the ex-socialist countries. International Economics and Economic Policy, 15(3), 587-627.
Kaufmann, D., Kraay, A., & Mastruzzi, M. (2011). The Worldwide Governance Indicators: Methodology and Analytical Issues. Hague Journal on the Rule of Law, 3(2), 220-246.
Klein, R., & Rai, A. (2009). Interfirm strategic information flows in logistics supply chain relationships. MIS Quarterly, 33(4), 735–762.
Knack, S. &. (2003). Trade intensity, country size and corruption. Economics of Governance, 1-18.
Kofarbai, H. Z. (2016). Investment Climate and Foreign Direct Investment in Nigeria: The Mediating Role of Ease of Doing Business. Journal of Energy and Economic Development, 2(2), 10.
Latan, H. J. (2017). Ethical Awareness, Ethical Judgment, and Whistleblowing: A Moderated Mediation Analysis. Partial Least Squares Path Modeling, 311-337.
Linders, G. J. (2005). Cultural and Institutional Determinants of Bilateral Trade Flows. Tinbergen Institute.
Majeed, M. T. (2014, December ). Corruption and Trade. Journal of economic integration, 29(4), 759-782.
Manova, K. (2012). Credit constraints, heterogeneous firms, and international trade. Review of Economic Studies, 80(2), 711-744.
Mohtadi, H. &. (2015). CORRUPTION, TAX EVASION AND TRADE PROTECTION. 38th Annual NBER Summer Institute conference. Cambridge: The National Bureau of Economic Research.
Morris, R., & Aziz, A. (2011). Ease of doing business and FDI inflow to Sub-Saharan Africa and Asian countries. Cross Cultural Management: An International Journal, 18(4), 400-411.
Muhammad, A., D'Souza, A., & Amponsah, W. (2011). Violence, Political Instability, and International Trade: Evidence from Kenya’s Cut Flower Sector. AAEA & NAREA Joint Annual Meeting 2011 (pp. 24-26). Pittsburgh: Agricultural & Applied Economics Association.
Mukherjee, D. (2016). Understanding the international trade-corruption linkage: taking stock and moving forward. The Business and Management Review, 7(3), 98.
Nunn, N. (2007). Relationship-specificity, incomplete contracts, and the pattern of trade. The Quarterly Journal of Economics, 122(2), 569-600.
Ozpolat, A. G. (2016). Does Rule of Law Affect Economic Growth Positively? Research in World Economy, 7(1), 107-117.
Pinheiro-Alves, R., & Zambujal-Oliveira, J. (2012). The Ease of Doing Business Index as a tool for investment location decisions. Economics Letters, 117(1), 66-70.
Piwonski, K. (2010). Does the ‘Ease of Doing Business’ In a Country Influence its Foreign Direct Investment Inflows? Rhode Island: Bryant University. Retrieved from ttps://digitalcommons.bryant.edu/honors_finance/13
Portugal-Perez, A. &. (2012). Export performance and trade facilitation reform: Hard and soft infrastructure. World development, 40(7), 1295-1307.
Rashid, M. L. (2017). Political Stability and FDI in the most Competitive Asia Pacific countries. Journal of Financial Economic Policy, 9(2), 140-155.
Ringle, C. M. (2006). Segmentation for Path Models and Unobserved Heterogeneity: The Finite Mixture Partial Least Squares Approach. University of Hamburg Research Paper on Marketing and Retailing No. 35. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1586309
Ringle, C. M., Wende, S., & Becker, J. M. (2014). SmartPLS 3. Hamburg: SmartPLS. Academy of Management Review, 419-445.
Ringle, C., & Wende, S. a. (2015). SmartPLS 3. SmartPLS GmbH: Boenningstedt.
Roy, S. (2014). Interaction between corruption and the GATT-WTO trade effect: a panel data analysis. Economics Bulletin, 34(3), 1968-1969.
Rugman, A. M., & Collinson, S. (2006). International Business. Essex: Pearson Education Limited.
Shan, J., & Sun, F. (1998). On The Export-led Growth Hypothesis For The Little Dragons: An Empirical Reinvestigation. Atlantic Economic Journal(24), 353-371.
Siddiqui, D. A., & Ahmed, Q. M. (2013). The effect of institutions on economic growth: A global analysis based on GMM dynamic panel estimation. Structural Change and Economic Dynamics, 24, 18-33.
Tang, H. (2012). Labor market institutions, firm-specific skills, and trade patterns. Journal of International Economics, 87(2), 337-351.
Teo, T. S., Srivastava, S. C., & Jiang, L. (2008). Trust and electronic government success: an empirical study. Journal of Management Information Systems, 99-132.
The World Bank. (2019). Doing Business 2019: Training for Reform. Washington,: The World Bank.
Thede, S., & Gustafson, N. (2012). The Multifaceted Impact of Corruption on International Trade. The World Economy, 651-666.
Torrez. (2002). The effect of openness on corruption. The Journal of International Trade & Economic Development:, 11(4), 387-403.
Wang, M. C. (2018). How Does Corruption affect International Trade? Comparative Analysis of Developing and Developed Countries. International Conference on Computer, Communication and Network Technology (pp. 643-647). Lancaster: DEStech Publications, Inc. doi:10.12783/dtcse/CCNT2018/24771
Younis, M. L. (2008). Political Stability and Economic Growth in Asia. 5(3), 203-208.
Yu, S., Beugelsdijk, S., & Haan, J. D. (2015). Trade, Trust and the Rule of Law. European Journal of Political Economy, 102-115.
Abeyasinghe, R. (2004). Democracy, Political stability, and Developing Country Growth:Theory and Evidence. Illinois: Illinois Wesleyan University.
Ali, M. S. (2015). Does Corruption Impede International Trade?New evidence from The EU and the MENA Countries. Journal of Economic Cooperation and Development, 36(4), 107-120.
Ãlvarez I. C., B. J. (2018). Does Institutional Quality Matter for Trade? Institutional Conditions in a Sectoral Trade Framework. World Development, 72-87.
Anderson, J. E. (2002). INSECURITY AND THE PATTERN OF TRADE: AN EMPIRICAL INVESTIGATION. The Review of Economics and Statistics, 342-352.
Anderson, J. E., & Marcouiller, D. (2002). Insecurity And The Pattern of Trade: An Empirical Investigation. The Review of Economics and Statistics, 342-352.
Ani, T. G. (2015). Effect of ease of doing Business to Economic growth among Selected Countries in Asia. Asia Pacific journal of multidisciplinary research, 3(5), 139-145.
Berden, K., Bergstrand, J. H., & Van Etten, E. (2014). Governance and globalisation. The World Economy, 37(3), 353-386.
Branstetter, L., Lima, F., Taylor, L. J., & Venâncio, A. (2013). Do entry regulations deter entrepreneurship and job creation? Evidence from recent reforms in Portugal. The Economic Journal, 124(577), 805-832.
Bussmann, M. S. (2006). Trade Liberalization and Political Instability in Developing Countries. Programming for Peace (pp. 49-70). Dordrecht: Springer.
C., Ã. I., Barbero, J., Pose, A. R., & ZofÃo, J. L. (2018). Does Institutional Quality Matter for Trade? Institutional Conditions in a Sectoral Trade Framework. World Development, 72-87.
Cenfetelli, R. T., & Bassellier, G. (2009). Interpretation of formative measurement in information systems research. Mis Quarterly, 689-707.
Chin, W. W. (1998). The partial least squares approach for structural equation modeling. Modern methods for business research, 295-336.
Christophersen, T., & Konradt, U. (2006). The development of a formative and a reflective scale for the assessment of on-line store usability. Journnal of Systematics, Cybernetics and Informatics, 20.
Corcoran, A., & Gillanders, R. (2015). Foreign direct investment and the ease of doing business. Review of World Economics,, 151(1), 103-126.
Damania, R. P. (2003). Trade liberalization, corruption, and environmental policy formation: theory and evidence. Journal of Environmental Economics and Management, 490-512.
Daskalakis, S., & Mantas, J. (2008). Evaluating the impact of a service-oriented framework for healthcare interoperability. eHealth beyond the horizon - get IT there: Proceedings of MIE2008 (Studies in Health Technology and Informatics). (pp. 285-190). Amsterdam, Netherlands: IOS Press.
de Sá Porto, P. C., Canuto, O., & Morini, C. (2015). The impacts of trade facilitation measures on international trade flows. The World Bank.
Dennis, A., & Shepherd, B. (2011). Trade facilitation and export diversification. The World Economy, 34(1), 101-122.
Di Giovanni, J., & Levchenko, A. A. (2013). Firm entry, trade, and welfare in Zipf's world. Journal of International Economics, 89(2), 283-296.
Evdokia, M., Orliac, T., & Minor, p. (2011). Trade facilitation indicators: The impact on trade costs. OECD Trade Policy Papers 118, OECD Publishing. Retrieved from http://econpapers.repec.org/paper/oectraaab/118-en.htm
Feenstra, R. C., & Ma, H. (2014). Trade facilitation and the extensive margin of exports. . The Japanese Economic Review, 65(2), 158-177.
Freund, C., & Bolaky, B. (2008). Trade, regulations, and income. Journal of development economics, 87(2), 309-321.
Garson, G. D. (2016). PARTIAL LEAST SQUARES (PLS-SEM):Regression and Structural Equation Models. North Carolina: Statistical Publishing Associates.
Gold, A. H., Malhotra, A., & Segars, A. H. (2001). Knowledge management: An organizational capabilities perspective. Journal of Management Information Systems, 185-214.
Grechyna, D. (2017). Trade Openness and Political Distortions.
Groot, H. L. (2003). The Institutional Determinants of Bilateral Trade Patterns. Tinbergen Institute.
Groot, H. L., Linders, M. G., & Rietveld, P. (2005). Institutions, Governance and International Trade:Opening the Black Box of OECD and GDP Per Capita Effects in Gravity Equations. IATSS Research, 29(2), 22-29.
Hair, J. F., Ringle, C. M., & Sarstedt, M. (2017). A primer on partial least squares structural equation modeling (PLS-SEM). Thousand Oaks, CA: Sage.
Hao, X., Lynch, J. G., & Chen, Q. (2010). Reconsidering Baron and Kenny: Myths and Truths About Mediation Analysis. Journal of Consumer Research, 37(2), 197–206.
Henseler, J., & Ringle, C. M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 115-135.
Henseler, J., Hubona, G., & Ray, P. A. (2018). Partial least squares path modeling: Updated guidelines. In H. Latan & R. Noonan (Eds.), Partial least squares structural equation modeling:Basic concepts, methodological issues and applications. New York: Springer.
Henseler, J., Ringle, C. M., & Sarstedt, M. (2012). Using partial least squares path modeling in international advertising research: Basic concepts and recent issues. Handbook of research on international advertising, 252-276.
Höck, C. R. (2010). Management of multi-purpose stadiums: Importance and performance measurement of service interfaces. International Journal of Services Technology and Management, 188-207.
Höck, M. &. (2006). Strategic networks in the software industry: An empirical analysis of the value continuum. IFSAM VIIIth World Congress. Berlin. Retrieved from http://www.ibl-unihh.de/IFSAM06.pdf.
Hu, L. T., & Bentler, P. M. (1998). Fit indices in covariance structure modeling: Sensitivity to underparameterized model misspecification. Psychological methods, 424.
Jovanovic, B., & Jovanovic, B. (2018). Ease of doing business and FDI in the ex-socialist countries. International Economics and Economic Policy, 15(3), 587-627.
Kaufmann, D., Kraay, A., & Mastruzzi, M. (2011). The Worldwide Governance Indicators: Methodology and Analytical Issues. Hague Journal on the Rule of Law, 3(2), 220-246.
Klein, R., & Rai, A. (2009). Interfirm strategic information flows in logistics supply chain relationships. MIS Quarterly, 33(4), 735–762.
Knack, S. &. (2003). Trade intensity, country size and corruption. Economics of Governance, 1-18.
Kofarbai, H. Z. (2016). Investment Climate and Foreign Direct Investment in Nigeria: The Mediating Role of Ease of Doing Business. Journal of Energy and Economic Development, 2(2), 10.
Latan, H. J. (2017). Ethical Awareness, Ethical Judgment, and Whistleblowing: A Moderated Mediation Analysis. Partial Least Squares Path Modeling, 311-337.
Linders, G. J. (2005). Cultural and Institutional Determinants of Bilateral Trade Flows. Tinbergen Institute.
Majeed, M. T. (2014, December ). Corruption and Trade. Journal of economic integration, 29(4), 759-782.
Manova, K. (2012). Credit constraints, heterogeneous firms, and international trade. Review of Economic Studies, 80(2), 711-744.
Mohtadi, H. &. (2015). CORRUPTION, TAX EVASION AND TRADE PROTECTION. 38th Annual NBER Summer Institute conference. Cambridge: The National Bureau of Economic Research.
Morris, R., & Aziz, A. (2011). Ease of doing business and FDI inflow to Sub-Saharan Africa and Asian countries. Cross Cultural Management: An International Journal, 18(4), 400-411.
Muhammad, A., D'Souza, A., & Amponsah, W. (2011). Violence, Political Instability, and International Trade: Evidence from Kenya’s Cut Flower Sector. AAEA & NAREA Joint Annual Meeting 2011 (pp. 24-26). Pittsburgh: Agricultural & Applied Economics Association.
Mukherjee, D. (2016). Understanding the international trade-corruption linkage: taking stock and moving forward. The Business and Management Review, 7(3), 98.
Nunn, N. (2007). Relationship-specificity, incomplete contracts, and the pattern of trade. The Quarterly Journal of Economics, 122(2), 569-600.
Ozpolat, A. G. (2016). Does Rule of Law Affect Economic Growth Positively? Research in World Economy, 7(1), 107-117.
Pinheiro-Alves, R., & Zambujal-Oliveira, J. (2012). The Ease of Doing Business Index as a tool for investment location decisions. Economics Letters, 117(1), 66-70.
Piwonski, K. (2010). Does the ‘Ease of Doing Business’ In a Country Influence its Foreign Direct Investment Inflows? Rhode Island: Bryant University. Retrieved from ttps://digitalcommons.bryant.edu/honors_finance/13
Portugal-Perez, A. &. (2012). Export performance and trade facilitation reform: Hard and soft infrastructure. World development, 40(7), 1295-1307.
Rashid, M. L. (2017). Political Stability and FDI in the most Competitive Asia Pacific countries. Journal of Financial Economic Policy, 9(2), 140-155.
Ringle, C. M. (2006). Segmentation for Path Models and Unobserved Heterogeneity: The Finite Mixture Partial Least Squares Approach. University of Hamburg Research Paper on Marketing and Retailing No. 35. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1586309
Ringle, C. M., Wende, S., & Becker, J. M. (2014). SmartPLS 3. Hamburg: SmartPLS. Academy of Management Review, 419-445.
Ringle, C., & Wende, S. a. (2015). SmartPLS 3. SmartPLS GmbH: Boenningstedt.
Roy, S. (2014). Interaction between corruption and the GATT-WTO trade effect: a panel data analysis. Economics Bulletin, 34(3), 1968-1969.
Rugman, A. M., & Collinson, S. (2006). International Business. Essex: Pearson Education Limited.
Shan, J., & Sun, F. (1998). On The Export-led Growth Hypothesis For The Little Dragons: An Empirical Reinvestigation. Atlantic Economic Journal(24), 353-371.
Siddiqui, D. A., & Ahmed, Q. M. (2013). The effect of institutions on economic growth: A global analysis based on GMM dynamic panel estimation. Structural Change and Economic Dynamics, 24, 18-33.
Tang, H. (2012). Labor market institutions, firm-specific skills, and trade patterns. Journal of International Economics, 87(2), 337-351.
Teo, T. S., Srivastava, S. C., & Jiang, L. (2008). Trust and electronic government success: an empirical study. Journal of Management Information Systems, 99-132.
The World Bank. (2019). Doing Business 2019: Training for Reform. Washington,: The World Bank.
Thede, S., & Gustafson, N. (2012). The Multifaceted Impact of Corruption on International Trade. The World Economy, 651-666.
Torrez. (2002). The effect of openness on corruption. The Journal of International Trade & Economic Development:, 11(4), 387-403.
Wang, M. C. (2018). How Does Corruption affect International Trade? Comparative Analysis of Developing and Developed Countries. International Conference on Computer, Communication and Network Technology (pp. 643-647). Lancaster: DEStech Publications, Inc. doi:10.12783/dtcse/CCNT2018/24771
Younis, M. L. (2008). Political Stability and Economic Growth in Asia. 5(3), 203-208.
Yu, S., Beugelsdijk, S., & Haan, J. D. (2015). Trade, Trust and the Rule of Law. European Journal of Political Economy, 102-115.