Determinants of Trade Flow in the Economic Community of Central African States (ECCAS): Does Governance Matter?

Abstract

Abstract Subject and purpose of work: This study analyzes the determinants of intra-ECCAS trade, with special attention paid to the role of institutional quality from 1996 to 2021. Materials and methods: The study conducts descriptive analysis and utilizes a Negative Binomial Pseudo Maximum Likelihood to analyze the determinants of intra-ECCAS trade. Results: The results suggest that gross domestic product (GDP), population, time taken for export shipment in the exporting countries and the bilateral real exchange rate of the importing partner country enhance intra-ECCAS trade flow. On the other hand, distance, two trading partners being landlocked, time for importing countries and bilateral real exchange rate of the exporting partner discourage this. Furthermore, the findings reveal that institutions are vital to intra-ECCAS trade. Conclusions: T he key d rivers of intra-ECCAS t rade a re GDP, population, t ime t aken for export shipment in the exporting countries, bilateral real exchange rate of the importing partner country, and institutions’ quality measures.