taken from the WBES, namely (i) the share of annual sales spent in informal payments or gifts to public officials to “get things done” regarding Customs, taxes, licenses, regulations and services; and (ii) the proportion of firms identifying business licensing and permits as a major or very severe obstacle. The latter variable is a broad indicator of the quality of firms’ interaction with public officials, and reflects firms’ perception of the difficulty to obtain operating and import licenses. Columns 21-30 of Table 9 show that our core results remain robust after the sequential introduction of these two variables, apart from Column 25 where uncertainty no longer seems to affect the third-year export survival rate once bribery is accounted for. The proportion of sales revenue forgone because of rent-seeking practices is positively associated with firm exit rates, while the share of firms reporting the incidence of hurdles faced in connection with business and import licenses reduces the survival rate of entrants.

While the robustness checks reported in this section show that our core results do not seem to be influenced by omitted variables bias, one may still argue about the presence of endogeneity due to reverse causality. We rule out this concern for the following reasons. First, even though one could claim that higher firm entry or survival rates in foreign markets may translate into more intense export activity leading to Customs and other border agencies overflow, and ultimately delays in the time required to export, it is difficult to see how this would also directly affect import times. Indeed, extensive data verifications and physical inspections carried out by border agencies for imports are usually not relevant for most exports. Unless the country applies Customs export duties, which few countries do nowadays and only for a limited set of products, Customs agents seldom check export value or classification (McLinden, Fanta, Widdowson, and Doyle, 2011).<sup>36</sup> This also explains why WCO guidelines to measure release times focus on import transactions (World Customs Organization, 2011). Second, another potential reason for reverse causality is that as more firms enter the export market and survive, the private sector could push for Customs reforms to enhance efficacy and reduce delays. This is also unlikely as current evidence deplores the lack of coordination between the private sector and Customs and other border control authorities so much that Article 23.2 of the WTO Trade Facilitation Agreement urges signatories to “establish and/or maintain a national committee on trade facilitation or designate an existing mechanism to facilitate both domestic coordination and implementation of [its] provisions” where the participation of the business community is highly recommended (International Trade Center, 2015).

corruption would enhance efficiency by helping lower bureaucratic burden and delay (Leff, 1964 and Lui, 1985). However, Kaufmann and Wei (1999) show that firms with the ability to pay more bribes to corruption-prone officials are precisely the ones that suffer more from “bureaucratic harassment” and red tape. In addition to influencing border clearance times, rent-seeking has a direct bearing on firms’ export decision, as shown by Olney (2015) who finds that corruption reduces the likelihood that a firm exports directly while raising the probability of resorting to intermediaries to access foreign markets. More generally, the literature has emphasized the trade-effects of institutional quality (see for example Levchenko, 2007 and Nunn, 2007).

> 36Volpe Martincus, Carballo, and Graziano (2015) show that in Uruguay, some exports are subject to Customs physical inspections for the purpose of (i) collecting export taxes on a narrow set of products, (ii) controlling tax reimbursement claims and (iii) fighting illegal trade. The first reason holds only for a limited list of countries and for a narrow set of products. The second reason requires the exchange of information between Customs and Tax administrations, a best practice rarely in place in most developing countries. Inspections to fight illegal trade also cover a limited set of transactions.

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