AERC Working Paper Series 2025

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How do South-South Integrations Affect Trade in Processed Goods? Evidence for Sub-Saharan African Countries
(AERC, 2025) Bayala, Dago Yves Steve
We examine the effects of regional integrations on processed goods exports for sub-Saharan African countries from 1990 to 2018. We use a structural gravity model estimated via a Poisson and Bernoulli pseudo maximum likelihood estimators to assess respectively the effects on intensive margins (increase in the value of existing trade) and extensive margins (increase in the number of export products). The results show that integrations in sub-Saharan Africa positively affect trade margins (intensive and extensive) for processed goods, and mainly at the extensive margins. We also find that the effects are more pronounced between countries with similar standards of living. Finally, we show that integrations in sub-Saharan Africa contribute to increased trade in intermediate goods and confirm at a sectorial level that intermediate inputs liberalization contribute significatively to industrialization of sub-Saharan African integrations. These results may have important implications for the establishment of the African Free Trade Area.