Abstract
Although there has been steady increase in intra-OIC trade, defined as intra-OIC imports as a share of total imports of OIC countries, in last few years, recent literature on intra-OIC trade shows that OIC membership has not much to contribute trade between OIC member countries. Then, what is the determinant of recent increase in intra-OIC imports from 14.4 to 17.6 between 2002 and 2006? Given the Makkah Declaration and the Ten-Year Programme of Action to increase intra OIC trade to 20% of global trade by the year 2015, this paper scrutinizes the determinant of intra-OIC trade by gravity modeling for the time period of 1995-2007. The data used herein is in real terms. Unlike recent literature, four important international trade determinants, tariff, proxy for trade facilitation & liberalization and depreciation of real exchange rate, together with depreciation of US dollar against Euro are included to the model. As for reference to border puzzle problem in recent intra-OIC trade literature, inclusion of these variables is argued to mitigate the omitted variable bias in the model.
Article Details
- Year: 2009
- Volume: 30
- Issue: 3
- Pages: 1 - 42
- Accepted: 25.06.2009
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DOI:
https://doi.org/10.5281/zenodo.20840143 -
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How to Cite?
Ahmet Suayb Gundogdu (2009). Determinant of Intra-OIC Trade; Policy or Exchange Rate. Journal of Economic Cooperation and Development, 30(3), 1-42. https://doi.org/10.5281/zenodo.20840143
