Prague Economic Papers 2023, 32(5):473-487 | DOI: 10.18267/j.pep.841

Financial Development and Intra-trade Relationships: Evidence from Panel Analysis of Regional Comprehensive Economic Partnership Countries

Chen Yan, Leilei Zhang
School of Economics Management, Pingdingshan University, Pingdingshan, China

This study accounts for the nexus between financial development and intra-trade relationships using nine Regional Comprehensive Economic Partnership (RCEP) countries with the extraction of data from secondary sources spanning between 1990 and 2021. The following are the con- clusions drawn from the study: exchange rate, interest rate and inflation rate, which are criti- cal macroeconomic variables, represent unfavourable factors that suppress the intra-trade rela- tionships within the RCEP region. In light of the above, this study recommends that any time the policymakers in RCEP countries desire better intra-trade relationships within RCEP countries, they should implement a unified monetary policy that will stimulate interest rate, exchange rate and inflation rate in such a way that the intra-trade relationships will be enhanced among the RCEP countries.

Keywords: financial development, interest rate, exchange rate, intra-trade, RCEP countries
JEL classification: B26, F14, F15, G21

Received: January 3, 2023; Revised: May 25, 2023; Accepted: May 29, 2023; Published: October 27, 2023  Show citation

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Yan, C., & Zhang, L. (2023). Financial Development and Intra-trade Relationships: Evidence from Panel Analysis of Regional Comprehensive Economic Partnership Countries. Prague Economic Papers, 32(5), 473-487. doi: 10.18267/j.pep.841
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