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Economic Diplomacy in Africa: The Impact of Regional Integration versus Bilateral Diplomacy on Bilateral Trade

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  • Sylvanus Kwaku Afesorgbor

    (Department of Economics and Business Economics, Aarhus University, Denmark)

Abstract

The paper examines the impact of two main instruments of economic diplomacy — regional integration and commercial diplomacy on export flows among African states. We test whether there is any evidence of a trade-off or complementary interaction between these two instruments in trade facilitation. We compare the effects of these two instruments of economic diplomacy on bilateral trade by employing a gravity model for 45 African states over the period 1980-2005. The results show that bilateral diplomatic exchange is a relatively more significant determinant of bilateral exports among African states compared to regional integration. We also find a nuanced interaction between these two instruments of economic diplomacy: the trade–stimulating effect of diplomatic exchange is less pronounced among African countries that shared membership of the same regional bloc. Generally, this could mean that there exists a trade-off between regional integration and commercial diplomacy in facilitating exports or a lack of complementarity between these two instruments of economic diplomacy.

Suggested Citation

  • Sylvanus Kwaku Afesorgbor, 2016. "Economic Diplomacy in Africa: The Impact of Regional Integration versus Bilateral Diplomacy on Bilateral Trade," Economics Working Papers 2016-09, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2016-09
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    More about this item

    Keywords

    Economic Diplomacy; Regional Integration; Bilateral Diplomacy; African Trade;
    All these keywords.

    JEL classification:

    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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