Border Crossing: Bayesian Gravity and Cross-Border Exports Between Myanmar and Its Neighbours

Using data from 18 border stations between 2018 and 2022, this paper analyzes the formal border exports between Myanmar and its neighbouring countries—Bangladesh, China, Laos, India, and Thailand. Firstly, it presents an overview of the export pattern that crosses international borders. Secondly, it applies a Bayesian gravity model to investigate the determinants of Myanmar’s border exports. The posterior mean estimates give a clear prediction that the border exports are positively related to the market size of the destination and adversely related to the distance, which is in line with standard gravity literature. It was further found that (i) border infrastructure plays a significant role in driving border exports as border stations having relatively better infrastructure are predicted to have higher levels of exports than those without, (ii) documentation cost is predicted to be a significant negative predictor of border exports, and (iii) border exports to destinations that have free trade agreements with Myanmar are predicted to be higher than destinations without such agreements.