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Estimation of Missing Intra-African Trade

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  • Villoria, Nelson

Abstract

Missing trade is defined as the exports and imports that may have taken place between two potential trading partners, but which are unknown to the researcher because neither partner reported them to the United Nation’s COMTRADE, the official global repository of trade statistics. In a comprehensive sample of African countries, over 40% of the potential trade flows fit this definition. For a continent whose trade integration remains an important avenue for development, this lack of information hinders the analysis of policy mechanisms -- such as the Economic Partnership Agreements with the EU -- that influence intra-regional trade patterns. This paper estimates the likely magnitude of the missing trade by modeling the manufacturing trade data in the GTAP Data Base using a gravity approach. The gravity approach employed here relates bilateral trade to country size, distance, and other trade costs while explicitly considering that high fixed costs can totally inhibit trade. This last feature provides an adequate framework to explain the numerous zero-valued flows that characterize intra-African trade. The predicted missing exports are valued at approximately 300 million USD. The incidence of missing trade is highest in the lowest income countries of Central and West Africa.

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Bibliographic Info

Paper provided by Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University in its series GTAP Research Memoranda with number 2915.

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Date of creation: 2008
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Handle: RePEc:gta:resmem:2915

Note: GTAP Research Memorandum No. 12
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Cited by:
  1. Woldie, Getachew Abebe & Siddig, Khalid, 2009. "The impact of banning export of cereals in response to soaring food prices: Evidences from Ethiopia using the new GTAP African database," MPRA Paper 18241, University Library of Munich, Germany.
  2. Woldie, Getachew Abebe & Siddig, Khalid, 2009. "Do subsidies matter in food price stabilization? Evidences from Ethiopia in a computable general equilibrium framework," MPRA Paper 29117, University Library of Munich, Germany.

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