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2024 | OriginalPaper | Buchkapitel

Trade and Institutional Inertia

verfasst von : Saeed Rasekhi

Erschienen in: Institutional Inertia

Verlag: Springer Nature Switzerland

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Abstract

The importance of institutions and their relationship with macroeconomic variables has attracted the attention of many researchers. The existing literature indicates a significant relationship between institutions and the economic environment, which is strengthened by trade openness. Also, the economic literature shows that the phenomenon of inertia is ambiguous and like a double-edged sword. It also seems that the existence of inertia, especially for developing countries, leads to suboptimal macroeconomic and foreign trade performance. By understanding these conditions, this chapter examines the relationship between foreign trade and institutional inertia. To answer this question while reviewing the literature, a simple theoretical model based on Gartner (Macroeconomics under flexible exchange rates. Harvester Wheatsheaf, New York, 1993) has been used. The findings show that there is a significant relationship between foreign trade and institutional inertia. Accordingly, although institutional change and foreign trade can move independently of each other, if they move together and this issue is addressed by policymakers, it can lead to a stronger relationship between institutions and economic performance.

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Vorheriges Kapitel Internal Empowerment Dynamics of Organizational Inertia Management

Nächstes Kapitel The Transition to Sustainable Energy and Institutional Inertia

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Nunn (2007) has examined the hypothesis by constructing a variable to measure the proportion of intermediate inputs of each good that requires relationship-specific investments, and with the United States input-output tables.

To read more about the concept inertia refer to Chapter “Inertia: Resistance and Endurance” of this book.

For the definitions of exogenous and endogenous institutions see Robertson and Langlois (1994) and Samadi and Alipourian (2021).

As Colombo and Delmastro states that business firms quite rarely change their organizational structure, a phenomenon usually referred to in the literature as structural inertia. It refers to the tendency of institutions to maintain the status quo or to resist deviating from existing structure.

To read more about the institutional change, see Samadi and Alipourian (2021).

To read more about the concepts of inertia, institutional inertia, and sources of institutional inertia refer to Chapters. “Inertia: Resistance and Endurance” and “An Introduction to Institutional Inertia: Concepts, Types and Causes” of this book.

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Titel: Trade and Institutional Inertia
verfasst von: Saeed Rasekhi
Verlag: Springer Nature Switzerland
Buch: Institutional Inertia
Print ISBN: 978-3-031-51174-5

Electronic ISBN: 978-3-031-51175-2

Copyright-Jahr: 2024
DOI: https://doi.org/10.1007/978-3-031-51175-2_10

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