The Impact of Economic, Financial and Political Risk on Industrial Exports within the Group of Member Countries of the Organization of Islamic Cooperation (OIC)

Country risks continue to reduce international trade. One of the missing links in the field of studies in the field of international trade patterns of Islamic countries is the lack of a coherent study on the impact of country risk and each of its components on intra-group trade patterns of Islamic countries. The main goal of the article is to evaluate the impact of economic, financial and political risk on industrial exports within the group of member countries of the Organization of Islamic Cooperation (OIC). This study examines the intra-group export patterns of this category of countries from the perspective of the gravity model and the pseudo-Poissian maximum likelihood method (PPML) during the period from 2002 – 2021. The results show that the intra-group export pattern of industrial goods of OIC member countries is affected by the market size and the political and financial risk of the countries of origin and destination, the real exchange rate, the distance and common border, and the economic risk of the destination countries. Meanwhile, the political risk variable has a significant negative impact on the intra-group industrial export pattern of the organization's member countries compared to other factors that determine country risk. The impact of economic risk is evaluated negatively only for export purposes, but the impact of financial risk is positive for exporters and importers of industrial goods of member countries. This study suggests that member countries of the organization pay more attention to the role of country risk, especially political risk, in the formation of industrial export patterns within the group. Therefore, increasing institutional capabilities related to export credit, reviewing risk assessment models and how to manage it is a key issue in regional cooperation.