International Economics
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- ItemWTO Trade Facilitation Measures and the Extensive Margin of Exports in the Tripartite: Comesa – EAC – SADC(African Economic Research Consortium, 2021-08-06) Leudjou, njiteu rolandThis study uses a gravity model for the year 2015 to analyze the impact of the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA) on extensive margin of exports (export diversification proxied by the number of products exported) by the Tripartite (COMESA, EAC and SADC) country members. It appears that all trade facilitation measures (except “fees and charges”) have a positive and significant effect on export diversification irrespective of the type of product or trading partner. “Appeal procedures” (the rights to traders to obtain review and correction of decisions made by Customs officials in an administrative and/or judicial proceeding) measures have the most critical effect. Exports within the Tripartite are more impacted than exports with partners outside the region. The increase in number of exported products is higher for commodities than for manufactured goods with intra-tripartite exports, whereas the opposite is observed with exports to partners in the rest of the world. Counterfactual analysis shows that if the Tripartite countries comply with regional best practice (or the WTO requirement) in trade facilitation, “advance rulings” (binding information about customs treatment of goods before imports) and “appeal procedures” measures would have the greatest effect on exports diversification respectively within the Tripartite, and with the rest of the world. SADC trade facilitation policies perform better than the EAC’s and COMESA’s, regardless of the type of product, partner or trade facilitation measure (except for “fees and charges”). The EAC performs better than COMESA. This study recommends implementing the WTO TFA which could increase export diversification both within the Tripartite Free Trade Area and with rest of world partners
- ItemDeterminants of Imports in Guinea(African Economic Research Consortium, 2021-07-16) AGBENO, YaoThe objective of this paper is to examine the factors that influence Guinea’s overall import demand using annual data covering the period 1980-2015. Through the Error Correction Model (ECM), we estimated the short- and long-term relationships to measure the effect of real investment expenditure, real effective exchange rate, real final consumption demand and trade policy on import demand, after testing the existence of a cointegration relationship between the different variables of the model. The results showed that in the short term as in the long term, the demand for real investment, the real demand for final consumption and the trade policy based on the adoption of the new tariff system from 2005 are the main determinants of the import request in Guinea. These results allowed us to draw some implications for economic policy
- ItemWhere are the Dynamics of Export Diversification in Ethiopia?(AERC, 2021-05-06) Kebede, Birhan EshetuWith the export promotion strategy, Ethiopia has tried to increase export earnings by exporting more in terms of volume and number of commodities. It has also formulated different strategies and undertaken various policy changes. Among such changes is the commitment to trade integration as revealed in existing trade negotiations. The export basket is dominated by coffee, but its share is shrinking because there are a few other new export items entering the exports basket, such as cut flowers, textile products and some processed goods. While Gravity Model is widely used to identify the determinants of trade, it is wise to employ product-destination descriptive matrix to analyze export diversification and identify the relevant factors that practically influence Ethiopia’s export performance. Based on the analysis for Ethiopia, the top 20 export commodities are contributing more than 80% of export earnings, but the performance of the new export items such as textile and textile articles is promising. Among the fastest growing exports, most of them are value added products such as vehicle parts, and the respective export earnings have grown by multiple times in 2013 compared to the value in 2004. At HS 6-digit level, among 316 New Products to Old Destinations (NPOD), 84 are from textile and textile articles and, though the values per each export are low, there are also 74 new exports in vehicles, aircraft, vessels and associated transport equipment. The major destinations of these dynamic products are the EU, North America, China, Middle East, Africa and India. Thus, the major factors that play a pivotal role in the export performance and diversification in Ethiopia are institutional and structural changes, trade facilitation and export priority, infrastructure improvements, foreign firm participation, trade promotion and preferential market access, stretched objectives and declining bilateral trade costs.
- ItemForeign Ownership and Productivity Growth: Firm Level Evidence from Cameroon(AERC, 2021-05-04) Njikam, Ousmanou; Leudjou, Roland Rostant NjiteuUsing a panel data set on Cameroonian manufacturing firms from 1993 to 2005, this paper evaluates the direct and indirect effects of the presence of foreign ownership on the productivity growth of local firms. We investigate spillovers through horizontal and backward linkages, differentiated by the country of origin of foreign investors. The paper also investigates whether and how the absorptive capacity of Cameroonian indigenous firms moderates the effect of foreign presence on productivity. Controlling for the degree of competition, our results indicate that foreign firms perform better than Cameroonian indigenous firms. We find evidence of negative intra- and interindustry spillovers. The analysis also produces evidence of negative spillovers from American, European and Asian affiliates through backward linkages. These negative horizontal and vertical productivity spillovers are mainly due to the limited absorptive capacity of Cameroonian firms, i.e., firms with the highest levels of absorptive capacity suffer the less from foreign presence. The results are robust to the use of different specifications.
- ItemRegional Integration and Cross-Border Mergers and Acquisitions in Africa: 2000-2014(African Economic Research consortium, 2020-11-10) Wilson, Magdalene Kasyoka; Alain Pholo Bala, Alain PholoIn this paper, we examined how regional integration affected cross-border M&A in Africa for the period 2000 to 2014 using a structural gravity model. We found that customs unions in Africa, specifically Southern Africa Customs Union (SACU) and the East African Community (EAC) are significant drivers of M&A by firms from within the unions but not those from outside, perhaps due to their relatively small size. This finding suggests that the depth of regional integration determines intra-regional M&A flows in Africa. Findings from this paper suggest that African governments need to strengthen the existing regional integration arrangements, as the case of SACU and EAC indicates, to benefit from intra-African cross-border M&A flows.