IDEAS home Printed from https://ideas.repec.org/a/beo/journl/v69y2024i243p93-116.html
   My bibliography  Save this article

How Trade Participation Fuels Innovation In Africa: Unveiling Insights Through Empirical Analysis

Author

Listed:
  • Victor Ushahemba Ijirshar
  • Isa Jibrin Okpe
  • Jerome Terhemba Andohol

Abstract

By utilising a nonstationary heterogeneous approach to uncover the dynamics between foreign trade participation and innovation levels in developing economies, this empirical study investigates how trade participation fuels innovation in 25 selected African countries. The African continent is experiencing significant economic growth and globalisation, making it essential to understand the potential linkages between international trade and innovation. Using a dynamic fixed effect estimator within the framework of nonstationary heterogeneous panel models on panel data of 25 African countries from 1996 to 2021, the study revealed that national income significantly influences both exports and imports in the region. The study also identified bidirectional causal links between industrial design applications, patents, and trademarks with exports and imports, highlighting the symbiotic relationship between innovation and trade engagement. Successful exports are found to foster investments in design, patents, and branding. Recommendations on the basis of these findings include fostering innovation ecosystems through research institutes and collaborations, developing balanced trade policies to support domestic industries and SMEs, offering incentives for research and development, and strengthening trade promotion agencies to assist businesses in navigating international markets, identifying trade opportunities, and addressing exportimport challenges.

Suggested Citation

  • Victor Ushahemba Ijirshar & Isa Jibrin Okpe & Jerome Terhemba Andohol, 2024. "How Trade Participation Fuels Innovation In Africa: Unveiling Insights Through Empirical Analysis," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 69(243), pages 93-116, October –.
    • Handle: RePEc:beo:journl:v:69:y:2024:i:243:p:93-116
    as

    Download full text from publisher

    File URL: http://www.ekof.bg.ac.rs/wp-content/uploads/2015/12/243-04.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Philippe Aghion & Nick Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2005. "Competition and Innovation: an Inverted-U Relationship," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(2), pages 701-728.
    2. Christian Dreger & Dierk Herzer, 2013. "A further examination of the export-led growth hypothesis," Empirical Economics, Springer, vol. 45(1), pages 39-60, August.
    3. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    4. Jože P. Damijan & Črt Kostevc, 2015. "Learning from Trade through Innovation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 77(3), pages 408-436, June.
    5. Patrik Gustavsson Tingvall & Andreas Poldahl, 2006. "Is there really an inverted U-shaped relation between competition and R&D?," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(2), pages 101-118.
    6. Kaddour Hadri, 2000. "Testing for stationarity in heterogeneous panel data," Econometrics Journal, Royal Economic Society, vol. 3(2), pages 148-161.
    7. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    8. Liliana Meza-González & Jaime Marie Sepulveda, 2019. "The impact of competition with China in the US market on innovation in Mexican manufacturing firms," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 28(1), pages 1-21, December.
    9. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626, National Bureau of Economic Research, Inc.
    10. Yueling Cai & Gongliang Wu & Dingsheng Zhang, 2020. "Does Export Trade Promote Firm Innovation?," Annals of Economics and Finance, Society for AEF, vol. 21(2), pages 483-506, November.
    11. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
    12. G. S. Maddala & Shaowen Wu, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 631-652, November.
    13. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    14. repec:bla:obuest:v:61:y:1999:i:0:p:631-52 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Walid Gani, 2024. "Does Competition Spur Innovation in North Africa? Evidence from a Panel ARDL Approach," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 16(2), pages 212-230, May.
    2. Victor Ushahemba IJIRSHAR & Isa Jibrin OKPE & Jerome Terhemba ANDOHOL & Philip Terhemen ABACHI & Solomon GBAKA, 2024. "Revolutionising Trade: Exploring how Innovation in Selected African Countries Shapes Economic Relations with Key Regions," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 5(5), pages 51-70, May.
    3. Nagmi Moftah Aimer, 2020. "Renewable energy consumption, financial development and economic growth: Evidence from panel data for the Middle East and North African countries," Economics Bulletin, AccessEcon, vol. 40(3), pages 2058-2072.
    4. Karmaker, Shamal Chandra & Hosan, Shahadat & Chapman, Andrew J. & Saha, Bidyut Baran, 2021. "The role of environmental taxes on technological innovation," Energy, Elsevier, vol. 232(C).
    5. Tsangyao Chang & Tsung-Pao Wu & Rangan Gupta, 2015. "Are house prices in South Africa really nonstationary? Evidence from SPSM-based panel KSS test with a Fourier function," Applied Economics, Taylor & Francis Journals, vol. 47(1), pages 32-53, January.
    6. Baltagi, Badi H. & Moscone, Francesco, 2010. "Health care expenditure and income in the OECD reconsidered: Evidence from panel data," Economic Modelling, Elsevier, vol. 27(4), pages 804-811, July.
    7. Gautam, Tej K. & Paudel, Krishna P., 2018. "The demand for natural gas in the Northeastern United States," Energy, Elsevier, vol. 158(C), pages 890-898.
    8. Hamit-Haggar, Mahamat, 2012. "Greenhouse gas emissions, energy consumption and economic growth: A panel cointegration analysis from Canadian industrial sector perspective," Energy Economics, Elsevier, vol. 34(1), pages 358-364.
    9. Shahnazi, Rouhollah & Dehghan Shabani, Zahra, 2020. "Do renewable energy production spillovers matter in the EU?," Renewable Energy, Elsevier, vol. 150(C), pages 786-796.
    10. Jaroslava Hlouskova & Martin Wagner, 2006. "The Performance of Panel Unit Root and Stationarity Tests: Results from a Large Scale Simulation Study," Econometric Reviews, Taylor & Francis Journals, vol. 25(1), pages 85-116.
    11. Shujaat Naeem Azmi & Tasneem Khan & Wajahat Azmi & Naghma Azhar, 2023. "A panel cointegration analysis of linkages between international trade and tourism: case of India and South Asian Association for Regional Cooperation (SAARC) countries," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(6), pages 5157-5176, December.
    12. Eleftherios Thalassinos & Marta Kadłubek & Le Minh Thong & Tran Van Hiep & Erginbay Ugurlu, 2022. "Managerial Issues Regarding the Role of Natural Gas in the Transition of Energy and the Impact of Natural Gas Consumption on the GDP of Selected Countries," Resources, MDPI, vol. 11(5), pages 1-22, April.
    13. Josep Carrion-i-Silvestre & Vicente German-Soto, 2009. "Panel data stochastic convergence analysis of the Mexican regions," Empirical Economics, Springer, vol. 37(2), pages 303-327, October.
    14. Omid Ranjbar & Xiao-Lin Li & Tsangyao Chang & Chien-Chiang Lee, 2015. "Stability of long-run growth in East Asian countries: New evidence from panel stationarity test with structural breaks," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 24(4), pages 570-589, June.
    15. Mounir Belloumi & Ahmed Aljazea, 2024. "Relationship between Energy and Economic Growth: Evidence from a Panel Nonlinear ARDL Model," International Journal of Energy Economics and Policy, Econjournals, vol. 14(2), pages 468-476, March.
    16. Olesia Kozlova & Jose Noguera-Santaella, 2019. "Relative efficiency of oil price versus oil output in promoting economic growth: Is OPEC’s strategy right?," Empirical Economics, Springer, vol. 57(6), pages 1997-2012, December.
    17. Martin Wagner, 2008. "On PPP, unit roots and panels," Empirical Economics, Springer, vol. 35(2), pages 229-249, September.
    18. Kholodilin Konstantin A. & Menz Jan-Oliver & Siliverstovs Boriss, 2010. "What Drives Housing Prices Down? Evidence from an International Panel," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(1), pages 59-76, February.
    19. Salisu, Afees A. & Ndako, Umar B., 2018. "Modelling stock price–exchange rate nexus in OECD countries: A new perspective," Economic Modelling, Elsevier, vol. 74(C), pages 105-123.
    20. Gangopadhyay, Kausik & Nishimura, Atsushi & Pal, Rupayan, 2016. "Can the information technology revolution explain the incidence of co-movement of skill premium and stock prices?," Economic Modelling, Elsevier, vol. 53(C), pages 107-120.

    More about this item

    Keywords

    industrial design applications; patent applications; research and development expenditure; trade participation; trademark applications.;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O36 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Open Innovation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:beo:journl:v:69:y:2024:i:243:p:93-116. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Goran Petrić (email available below). General contact details of provider: https://edirc.repec.org/data/efbeoyu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.