Financial Development, Trade Costs and Bilateral Trade Flows: Connecting the Nexus in ECOWAS

Evans S. Osabuohien (), John T. Odebiyi, Uchenna Efobi and Oluyemi O. Fayomi ()
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Evans S. Osabuohien: Covenant University
John T. Odebiyi: Covenant University
Oluyemi O. Fayomi: Covenant University

A chapter in Investment and Competitiveness in Africa, 2017, pp 153-175 from Springer

Abstract: Abstract Financial Development (FD) in both exporting and importing countries would be required to fund production and consumption, respectively. However, the extent to which this affects Economic Community of West African States-ECOWAS intra-regional trade, has not been empirically investigated, which motivates this study. It examines the pattern of trade, provides the level of FD and influence of FD in ECOWAS. It utilises the augmented gravity model of trade to empirically examine the effects of FD on bilateral trade flows in ECOWAS. To achieve the objectives, descriptive and econometric methods of analysis were engaged. Among the findings is that the FD of both exporting and importing countries are significant determinants of bilateral trade flows in ECOWAS. This suggests, among others, that more credit available to the private sector will significantly boost bilateral trade flows.

Keywords: Trade flows; ECOWAS; Financial development; Regional trade agreements (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:spr:aaechp:978-3-319-44787-2_8

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DOI: 10.1007/978-3-319-44787-2_8

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