| (i) Bilateral exports are measured in constant PPP; source: UNCTAD (Comtrade database) |
| (ii) GDPs are measured in constant PPP; source: Cepii (Chelem database) |
| (iii) is captured by the applied weighted average tariffs charged on the importing country ; source: World Bank |
| (World Development Indicators).As a sensitivity analysis, the Market Access Overall Trade Restrictiveness Indexes (MAOTRI) |
| captures the barriers faced by each exporter when selling in other countries; source: Kee et al. (2008), [2]. |
| (iv) NTBs are proxied by ad-valorem equivalents (AVEs) calculated in Kee et al.[2].The methodology is fully described in |
| the Appendix. |
| (v) is a larger proxy than transport costs; this indicator is built from the information gathered in a worldwide survey of the |
| companies involved in logistics services.Seven areas are covered by this index, namely: efficiency of the clearance process by |
| customs and other border agencies, quality of transport and information technology infrastructure for logistics, ease of arranging |
| international shipments, efficiency of the local logistics industry, ability to trace and check international shipments, domestic |
| logistics costs, as well as timeliness of shipments in reaching destination. The LPI is a weighted average of these variables. |
| It ranges between 1 (worst) to 5 (best); source: World Bank [3] |
| (vi) is a dummy variable which takes the value of 1 if a common language is spoken by at least 10% of the population in |
| each country pair (exporter and importer) and 0 otherwise; source: Cepii (Chelem database). |
| (vii) reflects colonial relationships over a long period of time with substantial participation in the colonized countryโs |
| governance.This variable is equal to 1 in case of colonial links and 0 otherwise.It accounts for cultural and historical |
| relationships which are expected to increase trade flows between some EU countries and Mediterranean countries.Source: Cepii |
| (Chelem database). |
| (viii) (Regional integration) is proxied by a bilateral dummy; source: WTO (RTA database) |
| (ix) is measured by the bilateral migrant stock in country i originating from country ; as a sensitivity analysis, it is |
| measured both in value and as a percentage of the exporting countryโs population; source: World Bank (Bilateral Migration and |
| Remittances 2010) |
| (x) is captured by several proxies: inward and outward bilateral stock or flows (in value and as a percentage of GDP); |
| World Bank (World Development Indicators); UNCTAD (Handbook of Statistics and World Investment Report). |
| (xi) is measured by trade in services (source: UNCTAD [4]) |
| (xii) is captured by several alternative proxies: voice and accountability, which measures to what extent citizens are able to |
| participate in selecting their government, political stability and the absence of violence and terrorism, government effectiveness, |
| regulatory quality, rule of law as well as the control of corruption (for more details, refer to[5]). |
