An Investigation of the Impacts of Trade Spillover on Democracy in Developing Countries: A Spatial Econometric Approach

The relationship between economy and democracy has always been one of the most controversial issues in humanities studies. In most studies, democracy has been considered as a factor affecting economic variables, but the influence of economic variables on democracy has been investigated much less. Based on the literature, the most important and effective economic factors of democracy are trade and economic growth. Therefore, in this paper, the impacts of trade on democracy have been investigated based on spatial econometric and geographical proximity in 2014. The results show that foreign trade has a significant and positive effect on democracy, but economic growth has no significant effect on it. Also, the effect of spatial proximity on improving the level of democracy in developing countries is approved. In general, the results confirm the spatial effects of geographical proximity and trade on improving democracy.