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Determinants of Trade Openness in Sub-Saharan Africa: Do Institutions Matter?

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  • Ibrahim Ngouhouo
  • Tii Nchofoung
  • Arsène Aurelien Njamen Kengdo

Abstract

This paper aims to analyse the determinants of trade openness in Sub-Saharan Africa (SSA) countries focusing on the role play by domestic institutions. To achieve this, the Generalized Methods of Moments (GMM) is carried out on 36 SSA countries over the period 1996-2017. The results of our estimation reveal that domestic institutions as a composite index determines trade openness as a composite share of Squalli and Wilson (2011). In addition, government effectiveness, Regulatory quality and rule of law were all enhancing on trade openness. Moreover, access to sea, foreign direct investment, and trade openness lagged by one period all significantly determine trade openness in our estimations, with all these effects positive. When trade share was considered as a robustness check, inflation and population growth were further found to be significantly determine trade openness, whereas GDP per capital was significantly trade enhancing. This result was robust to alternative institutional measures and sensitive to the choices of countries and sample periods considered. The policy implications of study engaged the different states of SSA to focus on improving the quality of their domestic institutions in elaborating their international trade policies.

Suggested Citation

  • Ibrahim Ngouhouo & Tii Nchofoung & Arsène Aurelien Njamen Kengdo, 2021. "Determinants of Trade Openness in Sub-Saharan Africa: Do Institutions Matter?," International Economic Journal, Taylor & Francis Journals, vol. 35(1), pages 96-119, January.
    • Handle: RePEc:taf:intecj:v:35:y:2021:i:1:p:96-119
    DOI: 10.1080/10168737.2020.1858323
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    Cited by:

    1. Simplice A. Asongu & Tii N. Nchofoung, 2021. "The terrorism-finance nexus contingent on globalisation and governance dynamics in Africa," Research Africa Network Working Papers 21/016, Research Africa Network (RAN).
    2. Tii N. Nchofoung & Simplice A. Asongu & Vanessa S. Tchamyou, 2024. "Effect of women’s political inclusion on the level of infrastructures in Africa," Quality & Quantity: International Journal of Methodology, Springer, vol. 58(2), pages 1181-1202, April.
    3. Hussein Al-Zyoud & Asheref Illiyan & Vasim Akram, 2022. "Impact of Economic Openness on Macro Technical Efficiency in South Asia," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 28(3), pages 91-103, November.
    4. Tii N. Nchofoung & Simplice A. Asongu & Vanessa S. Tchamyou, 2022. "Effect of women’s political inclusion on the level of infrastructures in Africa," Working Papers of the African Governance and Development Institute. 22/021, African Governance and Development Institute..
    5. Zhang Yu & Muhammad Umer Quddoos & Syed Abdul Rehman Khan & Muhammad Munir Ahmad & Laeeq Razzak Janjua & Muhammad Sajid Amin & Abdul Haseeb, 2023. "Investigating the moderating impact of crime and corruption on the economic growth of Bangladesh: Fresh insights," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 26(2), pages 185-207, June.
    6. Nchofoung, Tii N. & Asongu, Simplice A., 2022. "Effects of infrastructures on environmental quality contingent on trade openness and governance dynamics in Africa," Renewable Energy, Elsevier, vol. 189(C), pages 152-163.
    7. Tii N. Nchofoung & Simplice A. Asongu & Vanessa S. Tchamyou, 2022. "Gender political inclusion and inclusive finance in Africa," Working Papers of the African Governance and Development Institute. 22/063, African Governance and Development Institute..
    8. Djontu, Bruno Legrand, 2022. "Déterminants et efficacité des exportations camerounaises des produits agricoles : Une application du modèle de gravité à la frontière stochastique [Determinants and potential of Cameroon’s agricul," MPRA Paper 113959, University Library of Munich, Germany, revised 01 Aug 2022.
    9. Tii N. Nchofoung & Nathanael Ojong, 2023. "Natural resources, renewable energy, and governance: A path towards sustainable development," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(3), pages 1553-1569, June.
    10. Nchofoung, Tii N. & Achuo, Elvis Dze & Asongu, Simplice A., 2021. "Resource rents and inclusive human development in developing countries," Resources Policy, Elsevier, vol. 74(C).
    11. Suárez-Varela, Marta & Rodríguez-Crespo, Ernesto, 2022. "Is dirty trade concentrating in more polluting countries? Evidence from Africa," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 728-744.
    12. Lilac Nachum & Charles E. Stevens & Aloysius Newenham-Kahindi & Sarianna Lundan & Elizabeth L. Rose & Leonard Wantchekon, 2023. "Africa rising: Opportunities for advancing theory on people, institutions, and the nation state in international business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(5), pages 938-955, July.
    13. Ibrahim Ngouhouo & Loudi Njoya & Simplice A. Asongu, 2022. "Corruption, Economic Growth and the Informal Sector: Empirical Evidence from Developing Countries," Working Papers of the African Governance and Development Institute. 22/014, African Governance and Development Institute..
    14. Tii N. Nchofoung & Hervé Kaffo Fotio & Clovis Wendji Miamo, 2023. "Green taxation and renewable energy technologies adoption: A global evidence," Working Papers 23/007, European Xtramile Centre of African Studies (EXCAS).

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