The Trade Effects of Official Dollarization Over Time: A Meta-Regression Analysis

Fisnik Bajrami () and Ermal Lubishtani ()
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Fisnik Bajrami: Institute of Economic Studies, Charles University, Prague, Czech Republic
Ermal Lubishtani: University for Business and Technology, Prishtina, Kosovo

No 2026/24, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: One of the main expected benefits of official dollarization is its potential to promote trade by reducing exchange rate risk and transaction costs. This paper assesses the dollarization-trade relationship through a meta-regression analysis of 270 estimates from 14 empirical studies. The publication-bias diagnostics do not provide strong evidence that the reported effects are driven by selective reporting or small-study effects, while the average reported association remains positive. The results also show that the reported trade effect of dollarization is time-dependent. Reported effects are largest during the first 10 years after dollarization and decline as the post-dollarization horizon lengthens. This declining pattern remains evident across alternative specifications and robustness checks, although statistical precision weakens for the longest time horizon.

Keywords: Official dollarization; trade; monetary integration; meta-regression analysis; publication bias (search for similar items in EconPapers)
JEL-codes: C83 E42 F14 F15 F33 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2026-08, Revised 2026-08
New Economics Papers: this item is included in nep-fdg and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:fau:wpaper:wp2026_24

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