The relationship between the accounting and taxation environment and international trade in Lithuania

This article considers the effect of the accounting and taxation environment on international trade flows in Lithuania, which was tested using a gravity model. The gravity model was constructed using core gravity model variables, location variables, and several variables reflecting the accounting and taxation environment, including sustainability, in order to test two formulated research hypotheses. It was found that applying International Financial Reporting Standards (IFRS) in Small and Medium-sized Enterprises (SMEs) reduces international trade flows. Corporate income tax increases international trade flows. The taxes applied to international trade were not statistically significant. The Sustainable Development Reporting Index was found to have a particularly strong impact on import flow.