Infrastructure Development, Institutions, and Intra-Regional Trade: The Case of East Africa

James Ochieng, Daniel Abala and Mary Mbithi

The European Journal of Applied Economics, 2020, vol. 17, issue 2, 104-118

Abstract: This study empirically examines the relationship between infrastructure stock and bilateral trade flows using a panel of 11 countries in East Africa for the period 2000 to 2018. Infrastructure augmented gravity model was estimated using total bilateral exports for the countries in East Africa. Infrastructure was disaggregated into transport and information and communications technology (ICT) infrastructures. Two institutional variables, control of corruption index and regulatory quality, were incorporated in the model. By employing Poisson Pseudo Maximum Likelihood (PPML) estimator, the results confirm that both ICT and transport infrastructures and quality institutions positively impact on the volumes of total bilateral exports in East Africa. However, ICT infrastructure has a greater impact on trade flows compared to transport infrastructure. Therefore, more resources should be channelled towards increasing the stock of ICT infrastructure to propel trade and regional integration in East Africa.

Keywords: Infrastructure Stock; Institutional Quality; Intra-regional Trade; East Africa (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:sng:ejae01:137

DOI: 10.5937/EJAE17-26791

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