REGIONAL ECONOMIC INTEGRATION AND AGRICULTURAL SECTOR EXPORT PERFORMANCE (1980-2016): CASE OF COMESA
Date
2020-09-24
Authors
ABIGAIL, CHARI
Journal Title
Journal ISSN
Volume Title
Publisher
UNIVERSITY OF ZIMBABWE
Abstract
The study examined the effects of regional economic integration on the agricultural sector
export performance in the Common Market for Eastern and Southern Africa (COMESA)
region. Panel data was used for the member countries from 1980 to 2016. Gravity model and
Software for Market Analysis and Restrictions on Trade (SMART) model were used in
estimating the effects of regional economic integration comparing pre and post COMESAFTA period. As suggested by the Hausman test, the random effects model was used to
examine the effects of regional economic integration on export performance due to its
consistency and efficiency. The results from the study showed that the GDP of the exporting
country, GDP per capita of the importing country and the regional economic integration
dummy positively affect the agricultural sector export performance in the region. Using the
SMART model, the results showed that the formation of the free trade area created trade
worth close to US$65 million and positive trade diversion value worth US$5.6 million as well
as the total trade effect of US$70.4 million. From the results, the trading bloc policy makers
are encouraged to deepen the economic integration so that the policies in the agricultural
sector increase the sector’s production hence exports. Member countries should also adopt
policies that create an investor friendly environment if they are to increase their human
development and infrastructure. The study suggested that the trading bloc and its members
should engage in research and development so as to advance their technologies hence
innovation to increase their gross domestic product.
Description
International Economics