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The Effects of Conflict on Trade: Do Internal Conflicts Impede Shifts to Manufacturing and Technology Transfer?

In: The Palgrave Handbook of Africa’s Economic Sectors

Author

Listed:
  • John Verner

    (University of Pretoria)

  • Matthew Clance

    (University of Pretoria)

Abstract

This chapter adds to the literature on the relationship between trade and conflict by examining the impact of internal conflicts on trade structure. Two hypotheses are tested: (1) internal conflicts impede a shift to manufacturing (as measured by higher technology exports) and (2) internal conflicts reduce the willingness to send complex goods to countries experiencing conflict. The analysis uses geo-referenced conflict data for over 100 developing countries during the period 1989–2014. A subsample is then used to investigate the African continent. Internal conflicts are found to reduce exports and impede shifts to manufacturing in Africa. Evidence that internal conflicts reduce imports is strong and suggest conflicts impede technology transfer in developing countries. The results suggest achieving domestic stability would boost development.

Suggested Citation

  • John Verner & Matthew Clance, 2022. "The Effects of Conflict on Trade: Do Internal Conflicts Impede Shifts to Manufacturing and Technology Transfer?," Springer Books, in: Evelyn F. Wamboye & Bichaka Fayissa (ed.), The Palgrave Handbook of Africa’s Economic Sectors, pages 1063-1102, Springer.
    • Handle: RePEc:spr:sprchp:978-3-030-75556-0_42
    DOI: 10.1007/978-3-030-75556-0_42
    as

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