suggest that Kinshasa and Brazzaville firms are not significantly different in their predicted responses to lower trade costs. No such differences appear between manufacturing firms and pure trading firms, and between large and small firms, either. The regression analysis confirms the finding of Table 7 that transport costs and administrative trade costs are bigger obstacles to trade than border delays, but the difference between those two is not statistically significant. Finally, we find some evidence that formal firms are more responsive to falls in overseas trade costs than informal firms.

**Trade facilitation across Malebo Pool appears to hold particular promise for promoting local manufacturing and small-scale currently informal activity** . In the last two columns of Table 9, we concentrate on trade flows across Malebo Pool, without distinguishing different types of trade facilitation. Unlike in the case of total trade, formal firms do not stand to expand their activities more than informal ones in response to trade liberalization across Malebo Pool. The estimated regression coefficient on firm size even suggests that smaller firms anticipate expanding their activities proportionally more than larger firms, perhaps because larger firms are already better able to circumvent trade barriers. Finally, we find very large and statistically significant regression coefficients on the binary variable “manufacturing firm”. This means that local producers anticipate much larger scope for inter-city trade expansion than pure trading firms.

**The predicted impact of trade facilitation across Malebo Pool is larger for Brazzaville-based firms than for Kinshasa-based firms.** This is not surprising given that Kinshasa is a considerably larger market, and hence the scope for cross-border expansion relative to their home market is significantly larger for RC firms than for DRC firms. However, we find no significant difference in predicted flows from Kinshasa to Brazzaville relative to those in the reverse direction (see the coefficients on _Kinshasa_ → _Brazzaville_ in Table 9). This implies that trade facilitation between Kinshasa and Brazzaville would lead to a balanced expansion of trade flows in both directions.

_Results: Qualitative Findings_

**The non-quantifiable survey answers shed additional light on the existing patterns of trade and transport, as well as the main constraints to the expansion of cross-border exchanges.** They offer complementary insights into economic exchanges between Kinshasa and Brazzaville through the eyes of local operators.

**Brazzaville is currently considered a negligible market for most firms in Kinshasa, but responses point towards large untapped trade potential overall, and towards very large untapped potential for formal trade.** Of the 38 Kinshasa-based firms, only 17 declared significant sales in Brazzaville, ranging from 1 to 25 percent of turnover. The average share of sales is estimated at around 5 percent. Given that the population of Brazzaville corresponds to some 15 percent of the population of Kinshasa, and that average income is higher in Brazzaville, this is another pointer towards unexploited trade potential between the two cities.

**As a result of excessive administrative costs most cross-river trade is partly or fully informal.** Only two of the 17 Kinshasa firms who have significant client bases in Brazzaville export through official channels. The remaining 15 firms sell to their Brazzaville-based customers in Kinshasa and get their clients to ship the goods across Malebo Pool. Six Kinshasa-based firms declared that they had either exported formally to Brazzaville in the past of seriously considered doing so, but abandoned all such activity, citing excessive administrative costs including duties, paperwork and bribes. Informally traded goods are smuggled across the river via well established systems involving under-the-counter payments to various customs and security officials. Such trade occurs both on the ONATRA/CNTF ferries and on pirogues.

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