Multilateral Trade Resistance, International Competitiveness and African International Exports: A Network Perspective

Understanding and interpreting trade flows between trading partners/countries requires knowing whether countries are hubs or peripherals in the global trade network. These network statistics have been included in the gravity model in recent empirical works in international trade, to capture the notion of multilateral trade resistance While the network statistics logically captures the third-country effect, the literature, especially in Africa, has mainly focused on bilateral effects between trading partners, neglecting the multilateral nature of trade. Employing an Augmented gravity model, we estimated the effect of multilateral trade resistance/competition effect (Captured by the Clustering coefficient) and international competitiveness (captured by out-degree centrality) and importer openness (captured by in-degree centrality) on African international trade and found that these network statistics have robust and significant, but contrasting effects on African international trade flows. While an increase in degree variables increases African international trade flows on average, a higher clustering coefficient is found to have a negative impact on African export- which is consistent with the theory and our expectation. It is therefore advisable that the attention of African country exporters and policymakers should be geared towards encouraging the degree centrality and discouraging strong connection of African exporters within themselves to boost African international exports.