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Abstract
Using a gravity model framework this paper examines the effect of corruption on bi-
lateral agricultural trade. This is the first cross-country study in the trade literature
to examine the relationship between corruption and agricultural trade. The article
uses five-year panel data from 2006 to 2010 and corrects for sample-selection bias. It
also uses an instrumental variable approach for addressing endogeneity concerns. The
study provides evidence that corruption can be trade-taxing when the protection level
is low, but with the degree of protection higher than a threshold level, it becomes
trade-enhancing. The results are robust for different measures of corruption.