IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/104382.html
   My bibliography  Save this paper

The impact of institutions and infrastructure on intra-regional trade: The Economic Community of West African States

Author

Listed:
  • Abban, Stanley

Abstract

Institutions and infrastructure are key to stimulate trade flows and economic growth. This study seeks to investigate the role of institutions on trade in the Economic Community of West African States. Additionally, the study investigates the impact of trade and transport infrastructure. The study used a Poisson Pseudo Maximum Likelihood (PPML) estimator for the augmented gravity model of international trade. The results show that Rule of Law and Political Stability facilitated intra-regional trade while Regulatory Quality, Corruption Control and Government Effectiveness hindered trade. Additionally, the study showed that trade and transport infrastructure has a negative but insignificant effect on trade. The study recommends a new institutional framework to aid curtail the ills and emphasize the need to intensify security as a paramount requirement to facilitate trade in the community.

Suggested Citation

  • Abban, Stanley, 2020. "The impact of institutions and infrastructure on intra-regional trade: The Economic Community of West African States," MPRA Paper 104382, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:104382
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/104382/1/MPRA_paper_104382.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Costinot, Arnaud, 2009. "On the origins of comparative advantage," Journal of International Economics, Elsevier, vol. 77(2), pages 255-264, April.
    2. Álvarez, Inmaculada C. & Barbero, Javier & Rodríguez-Pose, Andrés & Zofío, José L., 2018. "Does Institutional Quality Matter for Trade? Institutional Conditions in a Sectoral Trade Framework," World Development, Elsevier, vol. 103(C), pages 72-87.
    3. Kaufman, Daniel & Shang-Jin Wei, 1999. "Does"grease money"speed up the wheels of commerce?," Policy Research Working Paper Series 2254, The World Bank.
    4. Barry Eichengreen & David Leblang, 2008. "Democracy And Globalization," Economics and Politics, Wiley Blackwell, vol. 20(3), pages 289-334, November.
    5. Andrei A. Levchenko, 2007. "Institutional Quality and International Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(3), pages 791-819.
    6. Mary M. Shirley, 2005. "Institutions and Development," Springer Books, in: Claude Menard & Mary M. Shirley (ed.), Handbook of New Institutional Economics, chapter 24, pages 611-638, Springer.
    7. Essa Bah & Karen Jackson & David Potts, 2018. "Regional trade institutions in West Africa: Historical reflections," Journal of International Development, John Wiley & Sons, Ltd., vol. 30(8), pages 1255-1272, November.
    8. L Alan Winters, 2004. "Trade Liberalisation and Economic Performance: An Overview," Economic Journal, Royal Economic Society, vol. 114(493), pages 4-21, February.
    9. Francois, Joseph & Manchin, Miriam, 2013. "Institutions, Infrastructure, and Trade," World Development, Elsevier, vol. 46(C), pages 165-175.
    10. Busse, Matthias & Hefeker, Carsten, 2007. "Political risk, institutions and foreign direct investment," European Journal of Political Economy, Elsevier, vol. 23(2), pages 397-415, June.
    11. Felix Olu Bankole & Kweku-Muata Osei-Bryson & Irwin Brown, 2015. "The Impact of Information and Communications Technology Infrastructure and Complementary Factors on Intra-African Trade," Information Technology for Development, Taylor & Francis Journals, vol. 21(1), pages 12-28, January.
    12. Chor, Davin, 2010. "Unpacking sources of comparative advantage: A quantitative approach," Journal of International Economics, Elsevier, vol. 82(2), pages 152-167, November.
    13. Nunn, Nathan, 2007. "Historical legacies: A model linking Africa's past to its current underdevelopment," Journal of Development Economics, Elsevier, vol. 83(1), pages 157-175, May.
    14. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    15. Ranganathan, Rupa & Foster, Vivien, 2011. "ECOWAS's infrastructure : a regional perspective," Policy Research Working Paper Series 5899, The World Bank.
    16. Gourieroux, Christian & Monfort, Alain & Trognon, Alain, 1984. "Pseudo Maximum Likelihood Methods: Theory," Econometrica, Econometric Society, vol. 52(3), pages 681-700, May.
    17. Baeten, Joost & Butter, Frank A.G. den, 2006. "Welfare gains by reducing transaction costs: Linking trade and innovation policy," Serie Research Memoranda 0012, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    18. Abban, Stanley & Ofori-Abebrese, Grace, 2019. "The Prospect Of ECOWAS Currency Union On Intra-Regional Trade," MPRA Paper 102226, University Library of Munich, Germany.
    19. Mike W Peng & Denis Y L Wang & Yi Jiang, 2008. "An institution-based view of international business strategy: a focus on emerging economies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(5), pages 920-936, July.
    20. Bonfatti, Roberto & Poelhekke, Steven, 2017. "From mine to coast: Transport infrastructure and the direction of trade in developing countries," Journal of Development Economics, Elsevier, vol. 127(C), pages 91-108.
    21. Santos Silva, J.M.C. & Tenreyro, Silvana, 2011. "Further simulation evidence on the performance of the Poisson pseudo-maximum likelihood estimator," Economics Letters, Elsevier, vol. 112(2), pages 220-222, August.
    22. Dani Rodrik, 2009. "Growth after the Crisis," World Bank Publications - Books, The World Bank Group, number 27937.
    23. Celbis, Mehmet Güney & Nijkamp, Peter & Poot, Jacques, 2013. "How big is the impact of infrastructure on trade? Evidence from meta-analysis," MERIT Working Papers 2013-032, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    24. Abban, Stanley, 2020. "On the Computation and Essence of the Nominal Convergence Criteria for Africa Currency Union: ECOWAS in Perspective," MPRA Paper 100215, University Library of Munich, Germany, revised 10 May 2020.
    25. Ismail, Normaz Wana & Mahyideen, Jamilah Mohd, 2015. "The Impact of Infrastructure on Trade and Economic Growth in Selected Economies in Asia," ADBI Working Papers 553, Asian Development Bank Institute.
    26. Shang-Jin Wei, 2000. "How Taxing is Corruption on International Investors?," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 1-11, February.
    27. Daniel Berkowitz & Johannes Moenius & Katharina Pistor, 2006. "Trade, Law, and Product Complexity," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 363-373, May.
    28. John McLaren, 2000. ""Globalization" and Vertical Structure," American Economic Review, American Economic Association, vol. 90(5), pages 1239-1254, December.
    29. Krenz, Astrid, 2016. "Do political institutions influence international trade? Measurement of institutions and the Long-Run effects," University of Göttingen Working Papers in Economics 276, University of Goettingen, Department of Economics.
    30. K. Bello Ajide & Ibrahim Dolapo Raheem, 2016. "Institutions-FDI Nexus in ECOWAS Countries," Journal of African Business, Taylor & Francis Journals, vol. 17(3), pages 319-341, September.
    31. Ziaul Haque Munim & Hans-Joachim Schramm, 2018. "The impacts of port infrastructure and logistics performance on economic growth: the mediating role of seaborne trade," Journal of Shipping and Trade, Springer, vol. 3(1), pages 1-19, December.
    32. J. M. C. Santos Silva & Silvana Tenreyro, 2006. "The Log of Gravity," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 641-658, November.
    33. Abdoulaye Seck, 2017. "How Facilitating Trade would Benefit Trade in Sub-Saharan Africa," Journal of African Development, African Finance and Economic Association (AFEA), vol. 19(1), pages 1-26.
    34. Yushi, Jiang & Borojo, Dinkneh Gebre, 2019. "The impacts of institutional quality and infrastructure on overall and intra-Africa trade," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 13, pages 1-34.
    35. Volpe Martincus, Christian & Carballo, Jerónimo & Garcia, Pablo M. & Graziano, Alejandro, 2014. "How do transport costs affect firms’ exports? Evidence from a vanishing bridge," Economics Letters, Elsevier, vol. 123(2), pages 149-153.
    36. Rafael Di Tella & Alberto Ades, 1999. "Rents, Competition, and Corruption," American Economic Review, American Economic Association, vol. 89(4), pages 982-993, September.
    37. Djankov, Simeon & Freund, Caroline, 2002. "Trade Flows in the Former Soviet Union, 1987 to 1996," Journal of Comparative Economics, Elsevier, vol. 30(1), pages 76-90, March.
    38. Gourieroux, Christian & Monfort, Alain & Trognon, Alain, 1984. "Pseudo Maximum Likelihood Methods: Applications to Poisson Models," Econometrica, Econometric Society, vol. 52(3), pages 701-720, May.
    39. James Adu Peprah & Noah Boakye Akosah & Marshall Wellington Blay, 2016. "Prospects for Freight and Logistics Companies in Operationalization of the ECOWAS Protocol on Free Movement of Goods and Persons," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(6), pages 56-75, June.
    40. Jiang, Yushi & Borojo, Dinkneh Gebre, 2018. "The impacts of institutional quality and infrastructure on overall and intra-Africa trade," Economics Discussion Papers 2018-75, Kiel Institute for the World Economy (IfW Kiel).
    41. Iheonu, Chimere & Ihedimma, Godfrey & Onwuanaku, Chigozie, 2017. "Institutional Quality and Economic Performance in West Africa," MPRA Paper 82212, University Library of Munich, Germany.
    42. Priya Ranjan & Jae Young Lee, 2007. "Contract Enforcement And International Trade," Economics and Politics, Wiley Blackwell, vol. 19(2), pages 191-218, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Abban, Stanley, 2020. "Currency Union as a Panacea for ills in Africa: A New Institutional Framework and Theoretical Consideration," MPRA Paper 105459, University Library of Munich, Germany.
    2. Olaifa Felix Gbenga & Olubiyi Ebenezer Adesoji & Benjamin Oluwasegun Olawale, 2024. "Determinants of Trade Flow in the Economic Community of Central African States (ECCAS): Does Governance Matter?," Economic and Regional Studies / Studia Ekonomiczne i Regionalne, Sciendo, vol. 17(1), pages 78-97, March.
    3. Sebil Olalekan Oshota & Bashir Adelowo Wahab, 2022. "Institutional Quality and Intra-Regional Trade Flows: Evidence from ECOWAS," Journal of African Trade, Springer, vol. 9(1), pages 73-106, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abban, Stanley, 2020. "Institutions, Infrastructure and East African Community Membership of Burundi and Rwanda on Trade," MPRA Paper 100654, University Library of Munich, Germany, revised 10 May 2020.
    2. Abban, Stanley, 2020. "The Prospect of the Proposed Currency Union on Intra-regional Trade: Southern African Customs Union," MPRA Paper 103123, University Library of Munich, Germany.
    3. Arief Bustaman & Rina Indiastuti & B. Budiono & Titik Anas, 2022. "Quality of Indonesia’s domestic institutions and export performance in the era of global value chains," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 11(1), pages 1-29, December.
    4. Ferguson, Shon & Formai, Sara, 2013. "Institution-driven comparative advantage and organizational choice," Journal of International Economics, Elsevier, vol. 90(1), pages 193-200.
    5. Nunn, Nathan & Trefler, Daniel, 2014. "Domestic Institutions as a Source of Comparative Advantage," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 263-315, Elsevier.
    6. Feifei Wu & Xinyu Yan, 2018. "Institutional Quality and Sustainable Development of Industries’ Exports: Evidence from China," Sustainability, MDPI, vol. 10(11), pages 1-22, November.
    7. Das, Joy & Tanger, Shaun & Fannin, J. Matthew & Kennedy, P. Lynn, 2020. "Institutional Determinant of Market Concentration and Trade in a General Equilibrium Setup," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304458, Agricultural and Applied Economics Association.
    8. Mehmet Huseyin Bilgin & Giray Gozgor & Chi Keung Marco Lau, 2017. "Institutions and gravity model: the role of political economy and corporate governance," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 7(3), pages 421-436, December.
    9. Beverelli, Cosimo & Fiorini, Matteo & Hoekman, Bernard, 2017. "Services trade policy and manufacturing productivity: The role of institutions," Journal of International Economics, Elsevier, vol. 104(C), pages 166-182.
    10. Chor, Davin, 2010. "Unpacking sources of comparative advantage: A quantitative approach," Journal of International Economics, Elsevier, vol. 82(2), pages 152-167, November.
    11. Frensch, Richard & Horvath, Roman & Huber, Stephan, 2021. "Openness effects on the rule of law: Size and patterns of trade," International Review of Law and Economics, Elsevier, vol. 68(C).
    12. Püschel, Julia, 2012. "Task dependence of U.S. service offshoring patterns," Discussion Papers 2012/15, Free University Berlin, School of Business & Economics.
    13. Javier Barbero & Giovanni Mandras & Ernesto Rodríguez-Crespo & Andrés Rodríguez-Pose, 2021. "Quality of government and regional trade: evidence from European Union regions," Regional Studies, Taylor & Francis Journals, vol. 55(7), pages 1240-1251, July.
    14. Bah, Mamadou & Atangana Ondoa, Henri & Kpognon, Koffi Délali, 2021. "Effects of governance quality on exports in Sub-Saharan Africa," International Economics, Elsevier, vol. 167(C), pages 1-14.
    15. Iwanow, Tomasz & Kirkpatrick, Colin, 2009. "Trade Facilitation and Manufactured Exports: Is Africa Different?," World Development, Elsevier, vol. 37(6), pages 1039-1050, June.
    16. Anthony Briant & Pierre-Philippe Combes & Miren Lafourcade, 2014. "Product Complexity, Quality of Institutions and the Protrade Effect of Immigrants," The World Economy, Wiley Blackwell, vol. 37(1), pages 63-85, January.
    17. Andrei A. Levchenko, 2013. "International Trade and Institutional Change," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 29(5), pages 1145-1181, October.
    18. Schneider, Sophie Therese, 2018. "North-South trade agreements and the quality of institutions: Panel data evidence," Hohenheim Discussion Papers in Business, Economics and Social Sciences 27-2018, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    19. Carlos Abreo & Ricardo Bustillo & Carlos Rodriguez, 2021. "The role of institutional quality in the international trade of a Latin American country: evidence from Colombian export performance," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 10(1), pages 1-21, December.
    20. Zissimos, Ben, 2017. "A theory of trade policy under dictatorship and democratization," Journal of International Economics, Elsevier, vol. 109(C), pages 85-101.

    More about this item

    Keywords

    Institution; Infrastructure; Poisson Pseudo Maximum Likelihood (PPML); intra-regional trade;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:104382. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.