Can better business environments promote trade partners’ economic growth?

ABSTRACT

This study empirically examines the impact of business environments on trade partners’ economic growth using the Ease of Doing Business Score of the World Bank’s Doing Business project for 2004–2018. The results show that with a threshold level of economic development, business environments have a significant positive impact on trade partners’ economic growth, which is the spatial spillover effect of the business environment. Further, we find that this effect is heterogeneous, and it is much easier for a more developed country to drive the economic growth of less developed countries.

KEYWORDS:

• Business environment
• spatial spillover
• trade partner
• economic growth

JEL CLASSIFICATION:

• F43
• F42
• F15

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ We are preparing a more detailed paper including mechanism analysis and hoping to be published in the future.