CARIFORUM and UK EPA Study

(

? ) / i X M GDP +

;

RS

=

n

å

(

)

/ X M GDP +

j

(4) where X and M are for exports and imports respectively, i is for the ith country in the sample of j countries. Further, when data on tariffs and nontariff restrictions (barriers) are unavailable or unreliable, openness becomes the most valuable alternative indicator of restrictive (illiberal) or a freer trade regime. Data on taxes and surreptitious trade policies are usually incomplete and unreliable. We find that openness and liquidity are the major driving forces behind the volume of trade. The level of product diversification in the region—not reported here—was not found to be significant though trade has the potential of increasing diversification (see Appendix A:11). 1 j =

Dependent Variable: LOG(AVGTRD) Method: Least Squares Date: 09/23/21 Time: 12:27 Sample: 1 182 Included observations: 182

Variable

Coefficient

Std. Error

t-Statistic Prob.

LOG(EXR)

0.003552 0.049253 0.072112 0.9426 0.000265 0.000511 0.518792 0.6046 -0.004965 0.010267 -0.483615 0.6293 0.003840 0.001467 2.616821 0.0097 0.000629 0.013444 0.046752 0.9628 -0.001209 0.001819 -0.664582 0.5072 1.043786 0.014309 72.94365 0.0000 3.998919 0.044594 89.67407 0.0000

GDPG

INFL

INT

LOG(K)

LFG

LOG(OP)

C

R-squared

0.972009 Mean dependent var 0.970883 S.D. dependent var 0.037816 Akaike info criterion 0.248829 Schwarz criterion 341.8979 Hannan-Quinn criter. 863.1764 Durbin-Watson stat

3.821355 0.221616 -3.669207 -3.528372 -3.612115 0.570326

Adjusted R-squared S.E. of regression Sum squared resid

Log likelihood

F-statistic

Prob(F-statistic)

0.000000

Actually, the regression provides a very good fit with errors that are normally distributed:

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