The impact of trade facilitation on poverty and inequality: Evidence from low- and middle-income countries

Abstract

Although there are numerous empirical studies on the effect of trade facilitation on international trade and gross domestic product (GDP), there have been no studies on the effect of trade facilitation on poverty and inequality. This study examines the effect of trade facilitation on poverty and inequality in low- and middle-income countries using generalized method of moments-type instrumental variable regression. In this study, trade facilitation is measured by the number of documents and the number of days needed for exports and imports. It is found that trade facilitation helps the low- and middle-income countries decrease poverty and inequality, and increase per capita GDP.