Impact of Regulations and Government Factors in the Importing Country on the Verification of the Country of Origin

Purpose: This study aimed to empirically analyze how the institutional quality of importing countries affects the trade facilitation of domestic exporting companies. Research design, data, and methodology: This study first distributed questionnaires and collected responses from domestic exporting companies listed by KOTRA, KITA, and those participating in relevant training programs. Subsequently, the indices from the WGI of the World Bank were used to assess the regulatory strictness and government trustworthiness of the export destination countries. Poisson regression analysis was conducted using STATA 17 SE based on the collected data. Results: The analysis indicated that regulatory strictness increases the frequency of origin verification, while government trustworthiness decreases the frequency of origin verification. The moderating effect of export experience mitigates the impact of regulatory strictness but does not affect government trustworthiness. Conclusions: Companies should understand the regulations and characteristics of the importing country's government to reduce the factors that hinder trade facilitation and promote trade. In addition, gaining diverse export experience can help mitigate the impact of regulatory strictness.