The welfare state, institutions and export performance

Bournakis, Ioannis; Tsoukis, Christopher

doi:10.1016/j.econmod.2015.11.011

The welfare state, institutions and export performance

Bournakis, Ioannis; Tsoukis, Christopher

Authors

Ioannis Bournakis

Christopher Tsoukis c.tsoukis@keele.ac.uk

Abstract

With a panel of 18 OECD countries, 1980–2005, we investigate the determinants of export performance, in particular the effects of the size of government and institutional features. In a model of endogenous extent of domestically-produced goods, government size has a non-linear effect on export performance; the export-maximising size of government (tax receipts) is around 40–45% of GDP; the best size of productive government spending is around 16% of GDP. Product market and labour market-related rigidities affect negatively the export performance both on their own and via a negative effect on the effectiveness of R&D and slow down the speed of adjustment. Among traditional variables, relative unit labour cost, R&D shares in GDP, TFP growth and human capital show up significantly and with the expected signs.

Journal Article Type	Article
Acceptance Date	Feb 1, 2016
Online Publication Date	Dec 4, 2015
Publication Date	Feb 1, 2016
Publicly Available Date	May 26, 2023
Journal	Economic Modelling
Print ISSN	0264-9993
Publisher	Elsevier
Peer Reviewed	Peer Reviewed
Volume	53
Pages	37 - 47
DOI	https://doi.org/10.1016/j.econmod.2015.11.011
Keywords	Export shares; Government size; Institutions; Unit labour cost; Competitiveness
Publisher URL	https://doi.org/10.1016/j.econmod.2015.11.011