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Trade Openness and Risk Sharing in Sub-Saharan Africa: Do Institutions and Financial Depth Matter?

Author

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  • Nnyanzi John Bosco

    (Department of Economic Theory and Analysis, School of Economics, College of Business and Management Sciences, Makerere University, Kampala, Uganda)

Abstract

The study investigates the extent to which trade openness could determine consumption risk sharing. The findings from panel regressions on Sub-Saharan African countries suggest a significant contribution of trade integration in the allocation of consumption risk. Further results point to the importance of reducing corruption if countries are to unhinge domestic consumption from domestic production. Additionally, as countries achieve higher financial deepening, they could become independent from international financial reliance thereby enjoying less Consumption risk sharing. The study argues for policies to promote trade and fight corruption if the observed levels of risk sharing in Sub-Saharan Africa are to improve.

Suggested Citation

  • Nnyanzi John Bosco, 2016. "Trade Openness and Risk Sharing in Sub-Saharan Africa: Do Institutions and Financial Depth Matter?," Global Economy Journal, De Gruyter, vol. 16(1), pages 161-187, March.
    • Handle: RePEc:bpj:glecon:v:16:y:2016:i:1:p:161-187:n:2
    DOI: 10.1515/gej-2015-0013
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    References listed on IDEAS

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    1. Shengzu Wang & Chris Marsh & Rishi Goyal & Narayanan Raman & Swarnali A Hannan, 2011. "Financial Deepening and International Monetary Stability," IMF Staff Discussion Notes 11/16, International Monetary Fund.
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    6. Thierry Bracke & Martin Schmitz, 2011. "Channels of international risk-sharing: capital gains versus income flows," International Economics and Economic Policy, Springer, vol. 8(1), pages 45-78, April.
    7. Calderón, César & Kubota, Megumi, 2018. "Does higher openness cause more real exchange rate volatility?," Journal of International Economics, Elsevier, vol. 110(C), pages 176-204.
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    9. Ventura, Luigi, 2008. "Risk sharing opportunities and macroeconomic factors in Latin American and Caribbean countries : A consumption insurance assessment," Policy Research Working Paper Series 4490, The World Bank.
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    Cited by:

    1. John Bosco Nnyanzi & Susan Kavuma & John Sseruyange & Aisha Nanyiti, 2022. "The manufacturing output effects of infrastructure development, liberalization and governance: evidence from Sub-Saharan Africa," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 49(2), pages 369-400, June.
    2. Soumtang Bimé, Valentine & Mondjeli Mwa Ndjokou, Itchoko Motande, 2025. "Financial access and income inequality in Sub-Saharan Africa: Does ethnic fragmentation give new evidence?," Economic Systems, Elsevier, vol. 49(1).

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