Intra-Industry trade and its effects on business cycle synchronization in ECOWAS: An empirical analysis

Louis-Joel Basneouinde Diendere (), Achille Augustin Diendere () and Jude Comlanvi Eggoh ()
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Louis-Joel Basneouinde Diendere: Thomas SANKARA University
Achille Augustin Diendere: Thomas SANKARA University
Jude Comlanvi Eggoh: University of Abomey-Calavi

Economics Bulletin, 2025, vol. 45, issue 2, 723 - 740

Abstract: This article examines the impact of intra-industry trade on Business cycle synchronization in the Economic Community of West African States (ECOWAS). The paper has two primary contributions. First, it utilizes the two-digit level HS classification to measure intra-industry trade, which is easy to interpret and calculate and is suitable for countries with low trade intensity. Second, it employs the system generalized method of moments (system-GMM) to analyze the dynamic relationship between variables and address the issue of endogeneity. Using data from 13 countries between 2000 and 2020 enables the investigation of endogeneity in ECOWAS. Results from the system-GMM estimation indicate a significant and positive relationship between intra-industry trade intensity and business cycle synchronization, advocating for policies focused on reducing tariff barriers, enhancing financial integration, and diversifying production.

Keywords: trade integration; business cycle synchronization; intra-industry trade; ECOWAS (search for similar items in EconPapers)
JEL-codes: E3 F1 (search for similar items in EconPapers)
Date: 2025-06-30
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