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Communication costs and trade in Sub-Saharan Africa

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  • Mupela, Evans

    ()
    (WSU, UNU-MERIT/MGSoG)

  • Szirmai, Adam

    ()
    (UNU-MERIT/MGSoG)

Abstract

This paper investigates the effects of connectivity charges (communication costs) on bilateral exports in Sub Saharan Africa (SSA). Data from 19 exporter countries was used together with communication costs data in a gravity model of trade setup. The export data derive from the IMF Direction of Trade and the COMTRADE databases, while the communication cost data was collated from a variety of sources including direct contact with service providers. We find that communication cost is an important factor in bilateral trade in the region. Communications have a significant negative effect on export intensity. The study also reveals that countries with high communication costs generally have lower export intensity than countries with low communication costs. The results suggest that investment in ICT infrastructure that brings down international communication costs will have a positive effect on regional trade in the long run.

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File URL: http://www.merit.unu.edu/publications/wppdf/2012/wp2012-060.pdf
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Bibliographic Info

Paper provided by United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) in its series MERIT Working Papers with number 060.

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Date of creation: 2012
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Handle: RePEc:unm:unumer:2012060

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Related research

Keywords: Trade; gravity model; communication cost; connectivity; export;

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  1. Brezis, Elise S & Krugman, Paul R, 1997. " Technology and the Life Cycle of Cities," Journal of Economic Growth, Springer, vol. 2(4), pages 369-83, December.
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