On the Empirics of Market Integration in ECOWAS

Abstract

This paper uses the gravity model to investigate the market implications of unilateral and preferential economic reforms in the Economic Community of West African States (ECOWAS). The results show that the traditional explanatory variables of the gravity model are the significant determinants of trade flows in the ECOWAS region, and that belonging to this grouping fosters trade. Hence policy advice should focus on strengthening these factors, which are likely to enhance the possibility of greater intra‐regional trade. This can contribute to drawing foreign direct investment to the region, enhancing policy credibility, and bringing greater economic and political stability.