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Panel Data Analysis of International Trade in West African Sub Region

Received: 2 February 2020     Accepted: 2 March 2020     Published: 4 June 2020
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Abstract

West African countries have suffered so much under poor economic growth rate; this issue is largely caused as a result of the poor performance in international trade, which is one of the most essential tools for economic growth. The study investigated the factors influencing international trade in West African Sub region. A Pooled OLS, Fixed Effect Model, and Random Effect Model were adopted to fit the panel regression model for the panel data sets. The study divided the models into three in other to have proper view of factors influencing international trade across West African Sub-region, each model contain the same independent variables and different dependent variables. The result shows that fixed effect model was accurate for the study. Also from the study it was observed that for the first model which use import as dependent variable, gross domestic production, foreign direct investment, and exchange rate are positively significant to import which implies that all the regressor variable influence import across west African sub region positively, while only GDP and FDI are positively significant to export and only FDI is positively significant to trade balance (TB). We therefore conclude that foreign direct investment is the key macro-economic variable that positively influences the policy of international trade across West African over the period of consideration.

Published in American Journal of Theoretical and Applied Statistics (Volume 9, Issue 4)
DOI 10.11648/j.ajtas.20200904.14
Page(s) 106-120
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2020. Published by Science Publishing Group

Keywords

Panel Data, Model, Pooled OLS, West African Sub-region

References
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[3] Dreze, J. 1961. ‘Leo Exportation Intra-CEE en 1958 et al Position Belge’, RecherchesEconomiques de Louvain (louvin), 27, 7171-738.
[4] Mathur, S. K. 1999. ‘Pattern of International Trade, New Trade Theories and Evidence from Gravity Equation Analysis’, The Indian Economic Journal, Vol. 47, No. 4: 68-88.
[5] Paas, T. 2000. ‘Gravity Approach for Modeling Trade Flows between Estonia and the Main Trading Partners’, Working Paper, No. 721, Tartu University Press, Tartu.
[6] Rodríguez, Francisco and Dani Rodrik. 2001. “Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence,” in Ben Bernanke and Kenneth S. Rogoff, eds., Macroeconomics Annual 2000, Cambridge, MA: MIT Press for NBER.
[7] Sachs, Jeffrey D. and Andrew Warner. 1995. “Economic Reform and the Process of Global Integration.” Brookings Papers on Economic Activity 1: 1-118.
[8] Frankel, Jeffrey and David Romer. 1999. “Does Trade Cause Growth?” American Economic Review 89 (June): 379-99
[9] Vamvakidis, Athanasios. 2002. “How Robust Is the Growth-Openness Connection? Historical Evidence.” Journal of Economic Growth 7: 57-80.
[10] World Bank, 2016, 2012. World Development Indicators (WDI). Economic and Social Data Service 665 (ESDS) International, (Mimas) University of Manchester
[11] Musila, J. W., Sigué, S. P. and Anyangah, J. O. (2003) ''An assessment of currency depreciation on inflation in Malawi: simulation results from a macroeconometric model,'', The Journal of African Development, Vol. 6, pp. 78-113.
[12] McAleese, D. (2004) Economics for business: competition, macro¬stability and globalisation. 3rd ed. Edinburgh Gate: Pearson Education Limited
[13] Borensztein, E., J. De Gregoria and J. Lee. 1998. “How does foreign investment affect economic growth?” Journal of International Economics, 45 (1): 115–35
[14] Collier, P. and Dollar, D. (2001) “Development effectiveness: What have we learnt”? Development Research Group, the World Bank. Available online at http://www.oecd.org/dataoecd/16/2/2664872.pdf. Accessed on 20/10/2010
[15] Hare, R. D. (2006). Psychopathy: A clinical and forensic overview. Psychiatric Clinics of North America, 29 (3), 709-724.
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[17] Baltagi, B. H. and Y. J. Chang, 1994, Incomplete panels: A comparative study of alternative estimators for the unbalanced one-way error component regression model, Journal of Econometrics 62, 67–89.
[18] Greene, W. H. (2008) Econometric Analysis. 6th Edition, Pearson Prentice Hall, Upper Saddle River.
[19] Breusch, T. S. and A. R. Pagan, 1980, The Lagrange multiplier test and its applications to model specification in econometrics, Review of Economic Studies 47, 239–253.
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  • APA Style

    Yahaya Haruna Umar, Bamanga Muhammad, Udeme Omoren. (2020). Panel Data Analysis of International Trade in West African Sub Region. American Journal of Theoretical and Applied Statistics, 9(4), 106-120. https://doi.org/10.11648/j.ajtas.20200904.14

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    ACS Style

    Yahaya Haruna Umar; Bamanga Muhammad; Udeme Omoren. Panel Data Analysis of International Trade in West African Sub Region. Am. J. Theor. Appl. Stat. 2020, 9(4), 106-120. doi: 10.11648/j.ajtas.20200904.14

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    AMA Style

    Yahaya Haruna Umar, Bamanga Muhammad, Udeme Omoren. Panel Data Analysis of International Trade in West African Sub Region. Am J Theor Appl Stat. 2020;9(4):106-120. doi: 10.11648/j.ajtas.20200904.14

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  • @article{10.11648/j.ajtas.20200904.14,
      author = {Yahaya Haruna Umar and Bamanga Muhammad and Udeme Omoren},
      title = {Panel Data Analysis of International Trade in West African Sub Region},
      journal = {American Journal of Theoretical and Applied Statistics},
      volume = {9},
      number = {4},
      pages = {106-120},
      doi = {10.11648/j.ajtas.20200904.14},
      url = {https://doi.org/10.11648/j.ajtas.20200904.14},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtas.20200904.14},
      abstract = {West African countries have suffered so much under poor economic growth rate; this issue is largely caused as a result of the poor performance in international trade, which is one of the most essential tools for economic growth. The study investigated the factors influencing international trade in West African Sub region. A Pooled OLS, Fixed Effect Model, and Random Effect Model were adopted to fit the panel regression model for the panel data sets. The study divided the models into three in other to have proper view of factors influencing international trade across West African Sub-region, each model contain the same independent variables and different dependent variables. The result shows that fixed effect model was accurate for the study. Also from the study it was observed that for the first model which use import as dependent variable, gross domestic production, foreign direct investment, and exchange rate are positively significant to import which implies that all the regressor variable influence import across west African sub region positively, while only GDP and FDI are positively significant to export and only FDI is positively significant to trade balance (TB). We therefore conclude that foreign direct investment is the key macro-economic variable that positively influences the policy of international trade across West African over the period of consideration.},
     year = {2020}
    }
    

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    T1  - Panel Data Analysis of International Trade in West African Sub Region
    AU  - Yahaya Haruna Umar
    AU  - Bamanga Muhammad
    AU  - Udeme Omoren
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    DO  - 10.11648/j.ajtas.20200904.14
    T2  - American Journal of Theoretical and Applied Statistics
    JF  - American Journal of Theoretical and Applied Statistics
    JO  - American Journal of Theoretical and Applied Statistics
    SP  - 106
    EP  - 120
    PB  - Science Publishing Group
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    UR  - https://doi.org/10.11648/j.ajtas.20200904.14
    AB  - West African countries have suffered so much under poor economic growth rate; this issue is largely caused as a result of the poor performance in international trade, which is one of the most essential tools for economic growth. The study investigated the factors influencing international trade in West African Sub region. A Pooled OLS, Fixed Effect Model, and Random Effect Model were adopted to fit the panel regression model for the panel data sets. The study divided the models into three in other to have proper view of factors influencing international trade across West African Sub-region, each model contain the same independent variables and different dependent variables. The result shows that fixed effect model was accurate for the study. Also from the study it was observed that for the first model which use import as dependent variable, gross domestic production, foreign direct investment, and exchange rate are positively significant to import which implies that all the regressor variable influence import across west African sub region positively, while only GDP and FDI are positively significant to export and only FDI is positively significant to trade balance (TB). We therefore conclude that foreign direct investment is the key macro-economic variable that positively influences the policy of international trade across West African over the period of consideration.
    VL  - 9
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Author Information
  • Statistics Department, Faculty of Science, University of Abuja, Abuja, Nigeria

  • Statistics Department, Faculty of Science, University of Abuja, Abuja, Nigeria

  • Statistics Department, Faculty of Science, University of Abuja, Abuja, Nigeria

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