| Using the border effect approach, our paper examines the influence of the legal framework quality of the Central and Eastern European countries on international trade. This approach offers an evaluation of the borders' impact on trade. A market is fragmented when actual trade differs from the trade that would be expected in an economy without border-related barriers. Recent findings have emphasized informal trade barriers as obstacles to trade flows (Anderson and Marcouiller, 2002; Anderson and Young, 2000; Rauch, 2001). We introduce different measures of the legal framework quality, which appears as a significant informal trade barrier. Actually, in case of conflict between two trade partners, it proves to be difficult for a given partner to get damages.... |
