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Monday, May 18, 2020 | History

4 edition of Trust-based trade found in the catalog.

Trust-based trade

Luis Araujo

Trust-based trade

by Luis Araujo

  • 60 Want to read
  • 0 Currently reading

Published by Centre for Economic Performance, London School of Economics and Political Science in London .
Written in English


About the Edition

Weak enforcement of international contracts can substantially reduce international trade. We develop a model where agents build reputations to overcome the difficulties that this institutional failure causes in a context of incomplete information. The model describes the interplay between institutional quality, reputations and the dynamics of international trade. We find that the conditional probability that a firm will stop exporting decreases and its foreign sales increase as the firm acquires greater export experience. The reason is that the informational costs that an exporter faces fall as the exporter becomes more confident about the reliability of its distributor. An improvement in the institutional quality of a country affects its imports through several distinct channels, as it changes the incentives of both current and potential exporters. Trade liberalization induces current exporters to increase their sales. It could induce entry as well, but this will happen only when the initial tariff is high and/or the institutional quality of the country is low.

Edition Notes

StatementLuis Araujo and Emanuel Ornelas.
SeriesCEP discussion paper -- no. 820
ContributionsOrnelas, Emanuel., London School of Economics and Political Science. Centre for Economic Performance.
Classifications
LC ClassificationsHC10
The Physical Object
FormatElectronic resource
ID Numbers
Open LibraryOL16390184M
LC Control Number2007619423

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Charles H. Green is an executive educator and business strategy consultant to the professional services industry. Charlie has taught in executive education programs for the Kellogg Graduate School of Management at Northwestern University, and for Columbia University Graduate School of Business, as well as independently through his firm, Trusted Advisor ed on: Octo The early rise of trust-based trade norms in Scandinavia is an overlooked factor in the region’s long-term socio-economic development and social trust accumulation. This result points to the importance of free trade today, especially in poor countries with low levels of Cited by: 2.


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Trust-based trade by Luis Araujo Download PDF EPUB FB2

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