The Effects of Domestic Legal Institutions on International Trade Flows


Yu Wang


The effects of institutions on international trade relations are of theoretical and practical interest. By following the research perspective that interprets institutions as the “rules of the game”, I suggest and study three domestic legal institutions---tenure system for judges, precedent law, and judicial review that supposedly have significant effects on international trade flows. My empirical tests show that both precedent law and judicial review have independent effects on bilateral trade volume while the proposed independent effect of tenured judge is unsupported. Moreover, my empirical evidences suggest that precedent law introduces its effect in a monadic fashion while judicial review (measured as the review of legislative legitimacy) introduces its effect in a dyadic way.


Comparative and Foreign Law | Economics | International Trade Law | Law and Economics

Date of this Version

February 2007