AJOU Central Library Repository: DETERMINANTS OF TRADE BALANCE OF COTE D'IVOIRE

DETERMINANTS OF TRADE BALANCE OF COTE D'IVOIRE

Keyword: Trade balance; FDI; Exchange rate; Domestic income; Cointegration; VECM

Alternative Abstract: ABSTRACT I analyze in this study the long run and short run determinants of Cote d’Ivoire balance of trade using VECM over the period 1980 – 2012. The dependent variable, trade balance is used as the difference between the total exports value and imports value. As explanatory variables, real effective exchange rate, foreign direct investment inflow and domestic income. One lag is used to run the regression and the results show that both FDI and domestic income positively and significantly affect trade balance in the long run, but REER has a negative and significant effect on trade balance in the long run. The test of the Wald-test shows no short run impact between the variables. The findings also confirm that in the long term, Cote d’Ivoire trade balance would worsen if the REER appreciates, which is likely to compromise the country trade surplus. They also confirm that increasing FDI inflow would increase the trade balance, and an improvement of the gross domestic income would improve the trade balance in the long term.

Appears in Collections:: Special Graduate Schools > Graduate School of International Studies > Department of International Trade > International Trade > 3. Theses(Master)

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