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Is Africa integrating? Evidence from product markets

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  • Lawrence Edwards
  • Neil Rankin

Abstract

This paper presents a price-based assessment of product market integration in Africa using disaggregated retail prices for 91 products and 12 African cities from 1991 to 2008. We find evidence of substantial deviations from the law of one price − product price differences between the cities averaged 76% over the period -- a result that is consistent with the presence of large barriers to trade in the continent. Mean price differences across cities fell by close to a quarter over the period, but the decline was concentrated in the early 1990s with little progress subsequently, despite the regional trade policies implemented by the countries. Gravity-style estimates reveal that reductions in external tariffs and global trends towards price convergence in the early 1990s are the key contributors to the trend in price integration amongst the African cities.

Suggested Citation

  • Lawrence Edwards & Neil Rankin, 2016. "Is Africa integrating? Evidence from product markets," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(2), pages 266-289, March.
  • Handle: RePEc:taf:jitecd:v:25:y:2016:i:2:p:266-289
    DOI: 10.1080/09638199.2015.1064158
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    References listed on IDEAS

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    1. repec:eee:reveco:v:54:y:2018:i:c:p:154-164 is not listed on IDEAS
    2. Neil Balchin & Lawrence Edwards & Asha Sundaram, 2015. "A Disaggregated Analysis of Product Price Integration in the Southern African Development Community," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 24(3), pages 390-415.

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