Zambia trade balance, international trade, commercial relations, multiple linear regression, exchange rate, export prices, import prices, trade freedom, economic development
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Abstract
This document analyzes the impact of various factors on Zambia's trade balance and its commercial relations with international partners.
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[...] The commercial relations of Zambia with its regional and international partners 1. Introduction Trade and commercial relations are of crucial importance for the development and prosperity of states in general. In fact, these elements constitute an essential driver for economic growth by enabling nations to export their products and services on international markets. This allows them to generate revenues and, as a result, strengthen their balance of payments. Thanks to trade, states can diversify their economies, which reduces their dependence on certain sectors, allowing them to protect themselves against economic shocks. [...]
[...] Conclusion We have provided an answer to our problem statement: "What are the variables that have a significant impact on Zambia's trade relations with its international partners?" The literature review identified the trade balance as an important variable, the values of which can provide an interpretation of the trade relations between Zambia and its partners. We conducted a multiple linear regression model that captures the relationships we want to study. By analyzing the coefficients and their significance, we were able to deduce the variables that have a significant impact on the trade relations between Zambia and its partners. We were able to determine that the exchange rate and the levels of import and export prices tend to make the trade balance deficit when their values increase. [...]
[...] This variable allows us to analyze the contribution of exports to GDP. Similarly, we have the variable csh_m (Share of Merchandise Imports), which represents the share of merchandise imports in GDP at current PPP. This variable allows us to analyze the contribution of imports to GDP. We will then define a new variable BC (Trade Balance) which will be expressed as a percentage of GDP at current PPP by calculating the difference BC=csh_x-csh_m. To this variable we will add: CCON : Real consumption of households and government, in current PPP. [...]
[...] For him, this balance has become persistent and deficit over the years. He searched for the causes by asking if they are structural or conjunctural. To answer the question, Dupont, L. (2022) relied on a regression model of the export and import functions of the two countries. The estimation was made using the GMM ('Generalized Method of Moments in differences'). The available data from the period from 1995 to 2017 allowed measuring the impact of 'Haiti's institutional environment on its commercial results with the Dominican Republic'. [...]
[...] It is worth noting that the trade balance has since stabilized, but around a low value. Construction of the Multiple Linear Regression Model: Figure relation of variable BC with each of the independent variables According to this graph, Zambia's trade balance increases when the total productivity of relevant factors for well-being increases. We observe the same finding when the real domestic absorption in current PPA increases. On the other hand, when the exchange rate, real household and government consumption, the respective levels of export and import prices increase, the trade balance decreases. [...]
