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| Judicial Quality, Incomplete Contract, and Quality of Trade |
| YU Miaojie, CUI Xiaomin, ZHANG Rui
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| National School of Development, Peking University |
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Abstract This paper estimates country-level quality for each tradable good using Feenstra and Romalis (2014) approach and provides empirical evidences that: 1) judicial quality is positively associated with average export quality, but a country with higher judicial quality does not exhibit comparative advantage in exporting contract-intensive goods in terms of quality; 2) a country with higher judicial quality does exhibit comparative advantage in importing contract-intensive goods in terms of quality; 3) importer’s judicial quality is a key determinant of relative quality of trade for contract-intensive goods, while exporter’s judicial quality is more relevant for relative quantity of trade for contract-intensive goods.
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Received: 12 August 2016
Published: 01 January 1900
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