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The Trade Effects of Official Dollarization Over Time: A Meta-Regression Analysis

Author

Listed:
  • Fisnik Bajrami

    (Institute of Economic Studies, Charles University, Prague, Czech Republic)

  • Ermal Lubishtani

    (University for Business and Technology, Prishtina, Kosovo)

Abstract

One of the main expected benefits of official dollarization is its potential to promote trade by reducing exchange rate risk and transaction costs. This paper assesses the dollarization-trade relationship through a meta-regression analysis of 270 estimates from 14 empirical studies. The publication-bias diagnostics do not provide strong evidence that the reported effects are driven by selective reporting or small-study effects, while the average reported association remains positive. The results also show that the reported trade effect of dollarization is time-dependent. Reported effects are largest during the first 10 years after dollarization and decline as the post-dollarization horizon lengthens. This declining pattern remains evident across alternative specifications and robustness checks, although statistical precision weakens for the longest time horizon.

Suggested Citation

  • Fisnik Bajrami & Ermal Lubishtani, 2026. "The Trade Effects of Official Dollarization Over Time: A Meta-Regression Analysis," Working Papers IES 2026/24, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Aug 2026.
    • Handle: RePEc:fau:wpaper:wp2026_24
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    File URL: https://ies.fsv.cuni.cz/en/trade-effects-official-dollarization-over-time-meta-regression-analysis
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    Keywords

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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Systems; Standards; Regimes; Government and the Monetary System
    • F15 - International Economics - - Trade - - - Economic Integration
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods

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