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Does Natural Resources Endowment Affect Export Diversification In Africa? A Cross-Country Analysis

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  • Niass, Dieynaba

Abstract

This research aims to analyze the effect of natural resources on the supply portfolio of African exports. Based on COMTRADE data on export products from 2000-to 2015, we apply a methodological approach based on two standard measurements of trade diversification indicators: active lines counting and the standardized Herfindahl-Hirschman index. These indicators are then linked to the status of resources-rich countries (and other controls) in the fixed-effects panel data model. The results of this article suggest that the presence of oil resources (non-renewable resources) has a negative effect on diversification, essentially through the channel of the degradation of institutions. Similarly, agricultural products (renewable resources) negatively affect African exports diversification (count and index). This effect is captured through the exchange rate and degradation of institutions' channels. This shows the need for the African continent to develop its own agricultural sector which could be a good strategy for diversification, but also to strengthen the quality of its institutions for good management of natural resources.

Suggested Citation

  • Niass, Dieynaba, 2022. "Does Natural Resources Endowment Affect Export Diversification In Africa? A Cross-Country Analysis," Conference papers 333416, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:333416
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