This study examines whether corruption conditions the relationship between structural transformation and bilateral trade using an unbalanced panel of 184 countries over 2000-2019. The relationship between institutional quality and structural transformation in trade is relatively unexplored. We find that both structural transformation and corruption control are positively associated with bilateral trade and complementary to trade gains. However, the marginal effects of structural transformation are larger under weaker governance in the short run, while stronger corruption control amplifies cumulative trade gains over medium- and long-run horizons. Importer-side governance plays a particularly strong role for low-income exporters accessing high-income destination markets.
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Eldarassi et al. (2026) studied this question.
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