Information and Communication Technology and Intra-Regional Trade in the Economic Community of West African States: Ambivalent or Complementary?

This paper analyzes the effect of Information and Communication Technology (ICT) on intra-regional trade in the Economic Community of West African States (ECOWAS) over the period 1994 to 2014. We use an augmented gravity model which controls for bilateral, exporter-year and importer-year fixed effects. To carry out our estimations, data is obtained from the World Bank, the United Nations Conference on Trade and Development as well as the Center for Prospective Studies and International Information (CEPII). The main findings suggest: (i) the presence of both the bilateral and export-year fixed effects; (2) the aggregate ICT index related significantly with intra-regional trade only for importing counties for the Fixed Effect (FE), Random Effect (RE) and Hausman-Taylor (HT) estimates unlike the Poisson pseudo maximum likelihood (PPML) estimates which shows a negative and significant relationship for the exporting country and a positive and significant for the importing country; (3) disaggregated results for the ICT variable-internet mimics those for the aggregate ICT index whereas finding for mobile phone and fix phones rather suggest that the relationship between the ICT and intra-regional trade was positive for both exporting and importing countries. As policy suggestion, we purport that investing in ICT infrastructure that particularly encourage the usage of mobile and fixed phones encourage intra-regional trade for both exporting and importing countries.