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2020, vol. 17, iss. 2, pp. 104-118
Infrastructure development, institutions, and intra-regional trade: The case of East Africa
University of Nairobi, School of Economics, Kenya
Keywords: Infrastructure Stock; Institutional Quality; Intra-regional Trade; East Africa
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.
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article language: English
document type: Original Scientific Paper
DOI: 10.5937/EJAE17-26791
received: 27/05/2020
revised: 31/07/2020
accepted: 07/09/2020
published in SCIndeks: 23/10/2020
peer review method: double-blind
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