INSTITUTIONAL DETERMINANTS OF AGRO-FOOD TRADE

The paper investigates the effects of the institutional drivers on trade in agricultural and food products using a gravity trade model. The focus is on the effects of quality of institutions and similarity of institutions in explaining variation in bilateral agricultural and food exports among the Organisation for Economic Cooperation and Development (OECD) countries. The empirical results confirm the separate effects for similarity of institutions and quality of institutions with agro-food export patterns. The similarity of institutions has significant but mixed associations with the agro-food exports in similar institutional frameworks. The effect of quality of institutions on agro-food exports varies: different institutions have different impacts on the agro-food exports. The good quality of institutions reduces the effects of the distance, which jointly with the level of economic development in importing OECD countries encourages the international agro-food trade.