Press freedom,market information,and international trade |
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Affiliation: | 1. Department of Economics and Business Economics, Aarhus University, Aarhus, Denmark;2. Research Institute of Industrial Economics (IFN), P.O. Box 55665, 102 15, Stockholm, Sweden;3. FIND – Research Centre for Firms and Industry Dynamics, Department of Economics and Business Economics, Aarhus University, Aarhus, Denmark |
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Abstract: | We consider a framework in which freedom of the media can alleviate barriers to trade, while in the absence of trustworthy market information, firms optimally withhold part of their export activity and opt for testing-the-waters strategies. We employ data on export flows among a large group of Western and Latin American countries combined with the Freedom House measure of press freedom to examine the main theoretical implication. In a standard set-up of gravity equations, we find evidence that the effects are partially conditional on the political institutions of the importing country: press freedom is strongly associated with trade with autocracies. |
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Keywords: | Trade flows Press freedom Regime types Gravity equations F13 H25 O10 |
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