Abstract The empirical evidence on the effect of corruption on international trade is mixed. Some researchers find that the relationship between exports and level of corruption is only significant for a small number of countries. On the other hand, some show that corruption adversely affects trade. The organization of corruption networks of each country can explain the impact of corruption on trade. When corruption networks are organized and controlled by a strong centralized state, corruption is likely to have a less detrimental economic impact than when it is organized by numerous government officials. Indeed, some literature suggest that centralized corruption networks have led to the East Asian paradox: the combination of high growth rates in real income per capita over relatively long time periods and high levels of corruption in large newly East Asian industrializing economies. In light of this, this paper finds that while corruption in the country itself impedes export trade for most countries, it has a positive effect on export trade. we find that corruption in a trading partner positively affects the export trade of a country. With this study, we can see the importance of understanding a country’s organization of corruption networks and how policymakers could implement meaningful policy reforms accordingly.

Introduction:
Corruption – the abuse of public resources for private gain – is pervasive and significant around the world and in some cases, it could amount to a large fraction of a country’s gross national product (GNP). Traditionally, corruption has always been condemned as immoral and as a major obstacle to good governance and development. It is estimated that in developing and transition countries alone, the private sector bribes corrupt politicians and government official. Due to the secrecy of corruption in most cases, the true costs of