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Small Island Developing States: Trade Patterns, Determinants and Performance

By Sawkut Rojid

Fall 2006

ABSTRACT

In this study, we are concerned with trade patterns and performances of Small Island Developing States (SIDS). Understanding the trade patterns of SIDS is very important in devising trade-oriented strategies that will promote their sustainable development. The main objectives of this paper are to assess the changes in patterns of trade of selected SIDS, to assess trade performance and to determine factors that explain trade patterns and the importance of those factors. To get a deeper insight in the exports structure of SIDS, we compute the Diversification Index, Export Diversification Index (EDI), Export Similarity Index (ESI), Revealed Comparative Advantage (RCA) and the Lafay Index. We finally use regression analysis (gravity approach) to understand the determinants of SIDS trade flows.

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