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.
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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)
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