Gotcha! A Profile of Smuggling in International Trade

32 Pages Posted: 3 Dec 2008

See all articles by Helge Berger

Helge Berger

Free University Berlin - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Volker Nitsch

Darmstadt University of Technology - Department of Law and Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: November 2008

Abstract

This paper explores official trade data to identify patterns of smuggling in international trade. Our main measure of interest is the difference in matched partner trade statistics, i.e., the extent to which the recorded export value in the source country deviates from the reported import value in the destination country. Analyzing 4-digit product level data for the world's five largest importers for the period from 2002-2006, we find that the reporting gaps are highly correlated with the level of corruption in both partner countries. This finding supports the hypothesis that trade gaps partly represent smuggling activities.

Keywords: corruption, illicit, illegal, trade, statistics, tariffs

JEL Classification: D73, F14, F19, O17, O57

Suggested Citation

Berger, Helge and Nitsch, Volker, Gotcha! A Profile of Smuggling in International Trade (November 2008). CESifo Working Paper Series No. 2475. Available at SSRN: https://ssrn.com/abstract=1310068

Helge Berger

Free University Berlin - Department of Economics ( email )

Boltzmannstr. 20
Berlin 14195, 14195
Germany
+49 30 838-54037 (Phone)
+49 30 838-52782 (Fax)

HOME PAGE: http://www.wiwiss.fu-berlin.de/berger/eng_index.htm

CESifo (Center for Economic Studies and Ifo Institute for Economic Research) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany
+49 89 9224 1266 (Phone)
+49 89 9224 1409 (Fax)

HOME PAGE: http://www.CESifo.de

Volker Nitsch (Contact Author)

Darmstadt University of Technology - Department of Law and Economics ( email )

Marktplatz 15
Residenzschloss
Darmstadt, 64283
Germany

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

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