Determinants of International Trade in The Muslim Developing Countries of The D-8 (Developing Eight Countries)

Abstract

Global economic integration has increased the importance of international trade for developing countries; however, trade performance among the Developing Eight (D-8) countries remains uneven and volatile. This study aims to examine the determinants of international trade in D-8 Muslim developing countries by assessing the roles of exchange rates, inflation, labor force participation, internet use, and government effectiveness. A quantitative descriptive research design was employed using panel data from seven D-8 member countries—Bangladesh, Egypt, Indonesia, Iran, Malaysia, Pakistan, and Turkey—covering the period from 2009 to 2023. Data were obtained from the World Bank and analyzed using panel data regression with EViews 13. The results show that exchange rates, inflation, and government effectiveness have positive and statistically significant effects on international trade, while labor force participation has a positive but statistically insignificant effect, and internet use has a negative but statistically insignificant effect. Collectively, the independent variables significantly explain variations in international trade, with an R-squared value of 0.7432. These findings indicate that macroeconomic stability and effective institutions are key drivers of trade performance, whereas labor availability and internet penetration alone are insufficient to strengthen trade outcomes. The study concludes that D-8 countries should reinforce institutional quality, maintain macroeconomic stability, and improve workforce capabilities and technological capacity to enhance international trade competitiveness in global markets.