Complex Goods' Exports and Institutions: Empirics at the Firm Level

Abstract

This paper analyzes the role of institutions in the exporter's country in promoting the exports. Firm‐level evidence from 22 developing and transition countries is provided to show that institutions matter for complex goods. A poor legal system, weak contractual enforcement, and corruption significantly reduce the exports of complex goods. In contrast, the effect of such institutions on the exports of simple goods remains ambiguous. Our main results are robust to the use of different econometric methods.