IDEAS home Printed from https://ideas.repec.org/a/cii/cepiie/2021-q3-167-10.html
   My bibliography  Save this article

Effects of governance quality on exports in Sub-Saharan Africa

Author

Listed:
  • Mamadou Bah
  • Henri Atangana Ondoa
  • Koffi Délali Kpognon

Abstract

This paper investigates the effects of governance quality on exports in sub-Saharan African countries. We include the six worldwide governance indicators (i.e., voice and accountability, political stability, regulatory quality, rule of law, control of corruption, and government effectiveness) as explanatory factors for exports and its components in a sample of 45 countries over the period 1996–2019. System GMM approach is privileged for estimations. We find that total exports and exports of services are positively affected by the six governance indicators, while manufactured goods are positively associated with those indicators except government effectiveness. While political stability, voice and accountability, rule of law, and control of corruption have positive effects on exports of goods, only voice and accountability impact positively primary commodities. This indicates that sub-Saharan African countries should focus on strengthening political governance and improving business environment to boost exports.

Suggested Citation

  • Mamadou Bah & Henri Atangana Ondoa & Koffi Délali Kpognon, 2021. "Effects of governance quality on exports in Sub-Saharan Africa," International Economics, CEPII research center, issue 167, pages 1-14.
    • Handle: RePEc:cii:cepiie:2021-q3-167-10
    as

    Download full text from publisher

    File URL: https://www.sciencedirect.com/science/article/pii/S211070172100024X
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Amelia Santos-Paulino & A. P. Thirlwall, 2004. "The impact of trade liberalisation on exports, imports and the balance of payments of developing countries," Economic Journal, Royal Economic Society, vol. 114(493), pages 50-72, February.
    2. Jakob Svensson, 2003. "Who Must Pay Bribes and How Much? Evidence from a Cross Section of Firms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 207-230.
    3. Clarke, George, 2001. "How the quality of institutions affects technological deepening in developing countries," Policy Research Working Paper Series 2603, The World Bank.
    4. Olivier Cattaneo & Michael Engman & Sebastian Saez & Robert M. Stern, 2010. "International Trade in Services: New Trends and Opportunities for Developing Countries (Description and Table of Contents)," Working Papers 605, Research Seminar in International Economics, University of Michigan.
    5. Asongu, Simplice A. & Nwachukwu, Jacinta C., 2016. "The role of governance in mobile phones for inclusive human development in Sub-Saharan Africa," Technovation, Elsevier, vol. 55, pages 1-13.
    6. Andrei A. Levchenko, 2007. "Institutional Quality and International Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(3), pages 791-819.
    7. Nathan Nunn, 2007. "Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(2), pages 569-600.
    8. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    9. Francois, Joseph & Manchin, Miriam, 2013. "Institutions, Infrastructure, and Trade," World Development, Elsevier, vol. 46(C), pages 165-175.
    10. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    11. William W. Olney, 2016. "Impact Of Corruption On Firm-Level Export Decisions," Economic Inquiry, Western Economic Association International, vol. 54(2), pages 1105-1127, April.
    12. Anderson James E & Young Leslie, 2006. "Trade and Contract Enforcement," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-36, November.
    13. Wang, Yongjin & Wang, Yanling & Li, Kunwang, 2014. "Judicial quality, contract intensity and exports: Firm-level evidence," China Economic Review, Elsevier, vol. 31(C), pages 32-42.
    14. Lien, Da-Hsiang Donald, 1990. "Corruption and allocation efficiency," Journal of Development Economics, Elsevier, vol. 33(1), pages 153-164, July.
    15. Henri L. F. De Groot & Gert‐Jan Linders & Piet Rietveld & Uma Subramanian, 2004. "The Institutional Determinants of Bilateral Trade Patterns," Kyklos, Wiley Blackwell, vol. 57(1), pages 103-123, February.
    16. Kristie Briggs, 2013. "Institutional quality as a barrier to trade," Applied Economics Letters, Taylor & Francis Journals, vol. 20(16), pages 1453-1458, November.
    17. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
    18. Álvarez, Inmaculada C. & Barbero, Javier & Rodríguez-Pose, Andrés & Zofío, José L., 2018. "Does Institutional Quality Matter for Trade? Institutional Conditions in a Sectoral Trade Framework," World Development, Elsevier, vol. 103(C), pages 72-87.
    19. Gyimah-Brempong, Kwabena & Traynor, Thomas L, 1999. "Political Instability, Investment and Economic Growth in Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 8(1), pages 52-86, March.
    20. Bojnec, Stefan & Ferto, Imre, 2009. "The Institutional Determinants Of Bilateral Agricultural And Food Trade," APSTRACT: Applied Studies in Agribusiness and Commerce, AGRIMBA, vol. 4(3-4), pages 1-5.
    21. Pierre‐Guillaume Méon & Khalid Sekkat, 2008. "Institutional Quality And Trade: Which Institutions? Which Trade?," Economic Inquiry, Western Economic Association International, vol. 46(2), pages 227-240, April.
    22. Barro, Robert J, 1996. "Democracy and Growth," Journal of Economic Growth, Springer, vol. 1(1), pages 1-27, March.
    23. Mr. Arvind Subramanian & Mr. Francesco Trebbi & Mr. Dani Rodrik, 2002. "Institutions Rule: The Primacy of Institutions over Integration and Geography in Economic Development," IMF Working Papers 2002/189, International Monetary Fund.
    24. James E. Anderson & Douglas Marcouiller, 2002. "Insecurity And The Pattern Of Trade: An Empirical Investigation," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 342-352, May.
    25. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    26. Augstin Kwasi Fosu, 2003. "Political Instability and Export Performance in Sub-Saharan Africa," Journal of Development Studies, Taylor & Francis Journals, vol. 39(4), pages 68-83.
    27. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    28. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross‐Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
    29. Simplice Asongu & Joseph Nnanna & Paul Acha-Anyi, 2019. "Information technology, governance and insurance in Sub-Saharan Africa," Social Responsibility Journal, Emerald Group Publishing Limited, vol. 16(8), pages 1253-1273, September.
    30. Daron Acemoglu & Simon Johnson & James A. Robinson, 2002. "Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1231-1294.
    31. Olivier Cattaneo & Michael Engman & Sebastián Sáez & Robert M. Stern, 2010. "International Trade in Services : New Trends and Opportunities for Developing Countries," World Bank Publications - Books, The World Bank Group, number 2476, December.
    32. Asongu, Simplice A. & Biekpe, Nicholas, 2018. "ICT, information asymmetry and market power in African banking industry," Research in International Business and Finance, Elsevier, vol. 44(C), pages 518-531.
    33. Štefan Bojnec & Imre Fertő & József Fogarasi, 2014. "Quality of institutions and the BRIC countries agro-food exports," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 6(3), pages 379-394, August.
    34. George R. G. Clarke, 2001. "How institutional quality and economic factors impact technological deepening in developing countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(8), pages 1097-1118.
    35. Makhlouf, Yousef & Kellard, Neil M. & Vinogradov, Dmitri, 2015. "Trade openness, export diversification, and political regimes," Economics Letters, Elsevier, vol. 136(C), pages 25-27.
    36. Faruq, Hasan A., 2011. "How institutions affect export quality," Economic Systems, Elsevier, vol. 35(4), pages 586-606.
    37. Fosu, Augustin Kwasi, 1992. "Political Instability and Economic Growth: Evidence from Sub-Saharan Africa," Economic Development and Cultural Change, University of Chicago Press, vol. 40(4), pages 829-841, July.
    38. Gani, Azmat & Clemes, Michael D., 2013. "Modeling the effect of the domestic business environment on services trade," Economic Modelling, Elsevier, vol. 35(C), pages 297-304.
    39. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, February.
    40. Mauro, Paolo, 1998. "Corruption and the composition of government expenditure," Journal of Public Economics, Elsevier, vol. 69(2), pages 263-279, June.
    41. Michael A Witt & Arie Y Lewin, 2007. "Outward foreign direct investment as escape response to home country institutional constraints," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 579-594, July.
    42. Priya Ranjan & Jae Young Lee, 2007. "Contract Enforcement And International Trade," Economics and Politics, Wiley Blackwell, vol. 19(2), pages 191-218, July.
    43. Yu, Miaojie, 2010. "Trade, democracy, and the gravity equation," Journal of Development Economics, Elsevier, vol. 91(2), pages 289-300, March.
    44. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 681-712.
    45. Beck, Paul J. & Maher, Michael W., 1986. "A comparison of bribery and bidding in thin markets," Economics Letters, Elsevier, vol. 20(1), pages 1-5.
    46. Sahoo, Pravakar & Dash, Ranjan Kumar, 2014. "India's surge in modern services exports: Empirics for policy," Journal of Policy Modeling, Elsevier, vol. 36(6), pages 1082-1100.
    47. Iwanow, Tomasz & Kirkpatrick, Colin, 2009. "Trade Facilitation and Manufactured Exports: Is Africa Different?," World Development, Elsevier, vol. 37(6), pages 1039-1050, June.
    48. Daniel Berkowitz & Johannes Moenius & Katharina Pistor, 2006. "Trade, Law, and Product Complexity," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 363-373, May.
    49. Doyle, Joanne M., 2017. "Persistence in the long-run expected rate of return for corporate pension plans," The Quarterly Review of Economics and Finance, Elsevier, vol. 63(C), pages 271-277.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Blessing Katuka & Calvin Mudzingiri, 2023. "Impact of Output Gap, COVID-19, and Governance Quality on Fiscal Space in Sub-Saharan Africa," Economies, MDPI, vol. 11(10), pages 1-20, October.
    2. Mamadou Bah & Nelson Abila, 2024. "Institutional determinants of insurance penetration in Africa," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 49(1), pages 138-179, January.
    3. Nestor Shpak & Zoriana Dvulit & Liana Maznyk & Włodzimierz Sroka&# & Andrij Zaverbnyj & Olha Levchenko, 2023. "Optimization of the Export Structure in Transport Companies: A Case Study," Central European Business Review, Prague University of Economics and Business, vol. 2023(1), pages 115-132.
    4. Gnangnon, Sèna Kimm, 2021. "WTO membership, the membership duration and the utilization of non-reciprocal trade preferences offered by the QUAD Countries," EconStor Preprints 247265, ZBW - Leibniz Information Centre for Economics.
    5. Alberto Costantiello & Angelo Leogrande, 2023. "The Impact of Voice and Accountability in the ESG Framework in a Global Perspective," Working Papers hal-04043775, HAL.
    6. Gnangnon, Sèna Kimm & Iyer, Harish, 2021. "Effect of Aid for Trade and Foreign Direct Investment Inflows on the Utilization of Unilateral Trade Preferences offered by the QUAD countries," EconStor Preprints 238211, ZBW - Leibniz Information Centre for Economics.
    7. Kere, Safilidin & Zongo, Amara, 2023. "Digital technologies and intra-African trade," International Economics, Elsevier, vol. 173(C), pages 359-383.
    8. Suárez-Varela, Marta & Rodríguez-Crespo, Ernesto, 2022. "Is dirty trade concentrating in more polluting countries? Evidence from Africa," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 728-744.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ferguson, Shon & Formai, Sara, 2013. "Institution-driven comparative advantage and organizational choice," Journal of International Economics, Elsevier, vol. 90(1), pages 193-200.
    2. Gnangnon, Sèna Kimm & Iyer, Harish, 2021. "Effect of Aid for Trade and Foreign Direct Investment Inflows on the Utilization of Unilateral Trade Preferences offered by the QUAD countries," EconStor Preprints 238211, ZBW - Leibniz Information Centre for Economics.
    3. Gani, Azmat & Scrimgeour, Frank, 2016. "New Zealand's trade with Asia and the role of good governance," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 36-53.
    4. Jessie Lin & Insa Flachsbarth & Stephan von Cramon‐Taubadel, 2020. "The role of institutional quality on the performance in the export of coconut products," Agricultural Economics, International Association of Agricultural Economists, vol. 51(2), pages 237-258, March.
    5. Karam, Fida & Zaki, Chahir, 2019. "Why Don’t MENA Countries Trade More? The Curse of Deficient Institutions," The Quarterly Review of Economics and Finance, Elsevier, vol. 73(C), pages 56-77.
    6. Christian Volpe Martincus & Andrés Gallo, 2009. "Institutions and Export Specialization: Just Direct Effects?," Kyklos, Wiley Blackwell, vol. 62(1), pages 129-149, February.
    7. Mehmet Huseyin Bilgin & Giray Gozgor & Chi Keung Marco Lau, 2017. "Institutions and gravity model: the role of political economy and corporate governance," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 7(3), pages 421-436, December.
    8. Prabir De, 2010. "Governance, Institutions, and Regional Infrastructure in Asia," Governance Working Papers 22878, East Asian Bureau of Economic Research.
    9. Arief Bustaman & Rina Indiastuti & B. Budiono & Titik Anas, 2022. "Quality of Indonesia’s domestic institutions and export performance in the era of global value chains," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 11(1), pages 1-29, December.
    10. Shadrack Muthami Mwatu, 2022. "Institutions and export performance: firm level evidence from Kenya," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 69(4), pages 487-506, December.
    11. Mamadou Bah & Nelson Abila, 2024. "Institutional determinants of insurance penetration in Africa," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 49(1), pages 138-179, January.
    12. Carlos Abreo & Ricardo Bustillo & Carlos Rodriguez, 2021. "The role of institutional quality in the international trade of a Latin American country: evidence from Colombian export performance," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 10(1), pages 1-21, December.
    13. Faruq, Hasan A., 2011. "How institutions affect export quality," Economic Systems, Elsevier, vol. 35(4), pages 586-606.
    14. Heyman Fredrik & Tingvall Patrik Gustavsson, 2015. "The Dynamics of Offshoring and Institutions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(4), pages 1975-2016, October.
    15. Azmat Gani, 2018. "Contract Enforcement and Trade," Journal of Industry, Competition and Trade, Springer, vol. 18(1), pages 107-119, March.
    16. Abdikarim Bashir Jama, 2020. "The Effect of Institutional Quality on Export performance of Middle East & North-Africa Region," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 4(1), pages 14-20, January.
    17. Wang, Yongjin & Wang, Yanling & Li, Kunwang, 2014. "Judicial quality, contract intensity and exports: Firm-level evidence," China Economic Review, Elsevier, vol. 31(C), pages 32-42.
    18. Essaji, Azim & Fujiwara, Kinya, 2012. "Contracting institutions and product quality," Journal of Comparative Economics, Elsevier, vol. 40(2), pages 269-278.
    19. Bengt Söderlund & Patrik Tingvall, 2014. "Dynamic effects of institutions on firm-level exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(2), pages 277-308, May.
    20. Das, Joy & Tanger, Shaun & Fannin, J. Matthew & Kennedy, P. Lynn, 2020. "Institutional Determinant of Market Concentration and Trade in a General Equilibrium Setup," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304458, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    Exports; Governance quality; Sub-Saharan Africa; GMM;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cii:cepiie:2021-q3-167-10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/cepiifr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.