How Does Corruption affect International Trade? Comparative Analysis of Developing and Developed Countries

Abstract

This paper analyzes the effect of corruption on international trade volume. It also compares the different effects between developing and developed countries with panel data over the period from 2005 to 2014 for 58 countries. The findings show that corruption perceptions index is positively related to the level of trade volume. It has more of a powerful influence on developing countries’ trade volumes than on developed countries’ trade volumes. To increase the trade volume of developing and developed countries, enhancing the transparency policy must be put into practice. Introduction