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

Abstract

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.