Does Intra-Africa Regional Trade Cooperation Enhance Africa’s Export Survival?
AbstractIn this paper, I use a stratified Cox Proportional Hazard Model to econometrically evaluate the effects of intra-Africa regional trade cooperation and other underlying factors on Africa`s export survival. Using a highly disaggregated dataset of bilateral trade flows at HS 6 digit level for 49 African countries for the period 1995 to 2009, I obtain 3 key main empirical results. First, intra-Africa regional trade cooperation do increase the likelihood of Africa`s export survival. The results show that the depth of regional integration matters on lowering Africa`s export hazard rates relative to countries that are not in any regional cooperation. Second, I find evidence that supports the “learning by export hypothesis”. That is export experience within regional as well as rest of the world markets increases the likelihood of Africa`s export survival. Finally, results suggests that infrastructure related trade frictions such as costs to export, time to export, and customs procedures to export as well as weak export supporting institutions have a negative effect on Africa`s export survival. Similarly macroeconomic developments particularly exchange rate volatility, financial underdevelopment, “inappropriate” foreign direct investment hurt chances of an African export survival. The results also show that interaction effects between regional integration initiatives and a variety of these trade frictions namely: costs to export, time to export and customs procedures effects on hazard rates diminish in significance with the depth of regional integration over time.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Economics Section, The Graduate Institute of International Studies in its series IHEID Working Papers with number 16-2012.
Length: 48 pages
Date of creation: 13 Dec 2012
Date of revision:
regional integration; export survival; trade relationships;
Find related papers by JEL classification:
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F15 - International Economics - - Trade - - - Economic Integration
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
This paper has been announced in the following NEP Reports:
- NEP-AFR-2013-01-07 (Africa)
- NEP-ALL-2013-01-07 (All new papers)
- NEP-DEV-2013-01-07 (Development)
- NEP-INT-2013-01-07 (International Trade)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michael Faye & John McArthur & Jeffrey Sachs & Thomas Snow, 2004. "The Challenges Facing Landlocked Developing Countries," Journal of Human Development and Capabilities, Taylor and Francis Journals, vol. 5(1), pages 31-68.
- Freund, Caroline; Rocha, Nadia, 2010.
"What Constrains Africas Exports?,"
CAGE Online Working Paper Series
16, Competitive Advantage in the Global Economy (CAGE).
- Alfonso A. Irarrazabal & Luca David Opromolla, 2008. "A Theory of Entry and Exit into Exports Markets," Working Papers w200820, Banco de Portugal, Economics and Research Department.
- Rauch, James E. & Watson, Joel, 2003.
"Starting small in an unfamiliar environment,"
International Journal of Industrial Organization,
Elsevier, vol. 21(7), pages 1021-1042, September.
- Rauch, J E & Watson, Joel, 1999. "Starting Small in an Unfamiliar Environment," University of California at San Diego, Economics Working Paper Series qt4rp145hc, Department of Economics, UC San Diego.
- James E. Rauch & Joel Watson, 1999. "Starting Small in an Unfamiliar Environment," NBER Working Papers 7053, National Bureau of Economic Research, Inc.
- James E. Rauch & Joel Watson, 1999. "Starting Small in an Unfamiliar Environment," Cowles Foundation Discussion Papers 1218, Cowles Foundation for Research in Economics, Yale University.
- Brenton, Paul & Saborowski, Christian & von Uexkull, Erik, 2009.
"What explains the low survival rate of developing country export flows ?,"
Policy Research Working Paper Series
4951, The World Bank.
- Paul Brenton & Christian Saborowski & Erik von Uexkull, 2010. "What Explains the Low Survival Rate of Developing Country Export Flows?," World Bank Economic Review, World Bank Group, vol. 24(3), pages 474-499, December.
- Cadot, Olivier & Iacovone, Leonardo & Pierola, Denisse & Rauch, Ferdinand, 2011.
"Success and failure of African exporters,"
Policy Research Working Paper Series
5657, The World Bank.
- Rauch, James E., 2010.
"Development through synergistic reforms,"
Journal of Development Economics,
Elsevier, vol. 93(2), pages 153-161, November.
- Wood, Adrian & Mayer, Jorg, 2001. "Africa's Export Structure in a Comparative Perspective," Cambridge Journal of Economics, Oxford University Press, vol. 25(3), pages 369-94, May.
- Guillaume Gaulier & Soledad Zignago, 2010.
"BACI: International Trade Database at the Product-Level. The 1994-2007 Version,"
2010-23, CEPII research center.
- Gaulier, Guillaume & Zignago, Soledad, 2004. "Notes on BACI (analytical database of international trade). 1989-2002 version," MPRA Paper 32401, University Library of Munich, Germany.
- Debaere, Peter & Mostashari, Shalah, 2010. "Do tariffs matter for the extensive margin of international trade? An empirical analysis," Journal of International Economics, Elsevier, vol. 81(2), pages 163-169, July.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Johannes Eugster).
If references are entirely missing, you can add them using this form.