Determinants of import and export flows between Cambodia and its major trading partners. A modified gravity approach : A thesis submitted in partial fulfilment of the requirements for the Degree of Doctor of Philosophy at Lincoln University

Cambodia began to liberalize its trade and re-integrate with the global economy in the early 1990s. Since then, the country’s imports and exports have increased dramatically with several new trading partners throughout the world. Cambodia has been developing its economic and trade policy over the past two decades to support trade growth. Although several empirical studies have investigated the factors that influence import and export flows, most have placed greater importance on economic factors while ignoring the significance of other external factors such as social, political and technological factors. There have been some econometric issues in the application of the gravity models in the literature. The main objective of this research is to examine the determinants of Cambodia’s bilateral import and export and unilateral export flows using the modified gravity model. The study uses the panel data from 1993 to 2017 covering 30 of Cambodia’s major trading partners. The models use the PPML method to estimate the bilateral import and export and unilateral export models. The study also examines the export expansion potential for Cambodia’s future export markets. The results show that increases in GDP, GDP per capita, FDI, ICT, money supply, private credit will potentially increase Cambodia’s total import and export volume. However, distance, economic freedom and globalization are factors that may hamper import and export flows between Cambodia and its trading partners. The result also shows that Cambodia can still potentially increase its exports to non-ASEAN markets like the EU and US markets. However, the neighbouring ASEAN markets such as Vietnam and Thailand will become less significant to Cambodia’s exports. The other ASEAN markets which will become more potential are Singapore, Malaysia, and the Philippines