The relationships between trade facilitation, trade flows, and capacity building are complex and challenging to assess, both empirically and in implementation. This working paper measures and estimates the relationship between trade facilitation and trade flows across 75 countries in global trade, considering four important categories: Port efficiency, customs environment, regulatory environment, and service sector infrastructure. A gravity model is employed that accounts for bilateral trade flows in manufactured goods in 2000-01 between the 75 countries, using traditional factors such as GDP, distance, language, and trade areas, and is augmented by the trade facilitation measures in the four categories for each country. The data is organized such that unit of observation is a pair of importing and exporting countries. The major sources of data are, the Commodity and Trade Database(COMTRADE) of the United Nations Statistics Division for trade data, the Trade Analysis and Information System (TRAINS) of the United Nations Conference on Trade and Development(UNCTAD) for tariff data, the World Development Indicators published by the World Bank for the data of gross national product(GNP) and per capita GNP, and 3 country surveys for trade facilitation indicator (see the data description document for detail).
