Abstract
There is direct evidence that both trade costs between OIC and developed countries as well as among OIC countries are falling and their shares in total exports of OIC countries are expanding. In turn, there was an upward trend in trade costs between OIC and non-OIC developing countries and a fall in their share in total exports of OIC countries. This paper argues that much of the changes in the direction of exports of OIC countries can be attributed to the changes in trade costs. In this framework, this paper analyzes the role of trade costs (in aggregate as well as its various components) in determining the direction of exports from OIC countries. The estimation results show that 1% reduction in trade costs can increase world exports by 3.8%, but it can increase exports from OIC countries up to 4.3%. When trade partners of OIC countries are considered separately, 1% fall in trade costs increases exports from OIC countries to developed countries by 4.2% and increases intra-OIC exports by 3.9%.
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Article Details
- Year: 2014
- Volume: 35
- Issue: 4
- Pages: 187 - 220
- Accepted: 31.12.2014
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DOI:
https://doi.org/10.5281/zenodo.21072137 -
Full Text (PDF)
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How to Cite?
Kenan Bagci (2014). Trade Costs and Intra-OIC Trade: What are the Linkages?. Journal of Economic Cooperation and Development, 35(4), 187-220. https://doi.org/10.5281/zenodo.21072137
