Abstract
This paper presents an empirical analysis of the impact of trade facilitation on international trade, as well as the effects of two dimensions: hard and soft infrastructure. Using 18 primary variables, we constructed four indicators of 30 lower-middle-income and 33 upper-middle-income countries over the period 2011-2017. After applying the system-generalised method of moments (GMM), the main finding is that all trade facilitation indicators have a significant effect on exports. However, improvements in physical infrastructure are more likely to increase exports than the efficiency of borders, transport, information and communication technologies (ICTs) and institutions, from the most significant to the least significant. It is also found that the effect of hard infrastructure on exports is virtually the same as that of soft infrastructure. Hard and soft infrastructure must therefore be considered at the same level, as the effectiveness of international trade depends on both.
Highlights
Trade facilitation is increasingly important in national and international trade policies
The reliability of the trade facilitation index was measured by composite reliability, and the measures of 0.809, 0.777, 0.541 and 0.647, respectively, demonstrate once again the high reliability of the results. This result allows us to validate our measures of physical infrastructure, information and communication technologies (ICTs), border and transportation efficiency and institution through factor analysis, in which the values of the saturation coefficient were at a high level and above the 0.5 thresholds, indicating the significant level of the saturation coefficient and the explicit composition of the factors (Werts, Linn, & Jöreskog, 1974)
This study aimed to analyse all aspects of trade facilitation, including hard and soft infrastructure and their impacts on international trade
Summary
Trade facilitation is increasingly important in national and international trade policies. In recent decades, it has become an essential instrument for the effective international trade and economic development of countries, due to its impact on competitiveness and its growing capacity to attract foreign direct investment, in the area of infrastructure. The United Nations Conference on Trade and Development (UNCTAD) focuses on transport infrastructure and assists developing countries in identifying their needs and priorities regarding trade and transport facilitation. The UNCTAD provides assistance in planning the implementation of specific trade facilitation measures. The Organisation for Economic Co-operation and Development (OECD) focuses on trade facilitation in developed countries. Trade facilitation covers the whole range of border procedures, from the electronic exchange of data in a transfer to the simplification and harmonisation of trade documents, as well as the possibility of appealing against administrative decisions of border services
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