Comparing the Performance of Uganda’s Intra-East African Community Trade and Other Trading Blocs: A Gravity Model Analysis
This paper examines factors that determine Uganda’s trade flows and specifically compares the impact and performance of the different trade blocs on Uganda’s trade patterns and flows. The empirical question is whether Uganda’s trade is getting more integrated in the East African Community (EAC) region or is still dominated by other trading blocs, namely European Union (EU), Asia and Common Market for Eastern and Southern Africa (COMESA)? Two analytical approaches are used, namely: trade indicators and estimation of the gravity models using data extracted from COMTRADE for the period 2001 – 2009 (panel). We estimate determinants of export and import trade flows separately using static random, dynamic random and IV GMM models. The results suggest a strong relationship between belonging to a trading bloc and trade flows. Likewise, Uganda’s import and export trade flows have conspicuously adjusted to the gravitational forces of the EAC during the progress of the integration. Whereas exports are being integrated more in the EAC and COMESA regions, imports are more integrated in the Asian and EU trading blocs. Therefore, strong links with trading blocs outside the EAC (i.e. EU and Asia) with regards to imports still exist. The trade indicators demonstrate that Uganda exports largely primary products and imports manufactured products. It is imperative for Uganda to target implementation of regional trade agreements to expand the country’s export markets. The EAC region should attract investment in production of high technology products to increase intra-EAC imports and reduce imports from Asia and the EU.
|Date of creation:||Apr 2013|
|Contact details of provider:|| Postal: 51 Pool Road, Makerere University Campus, P.O.Box 7841 Kampala|
Web page: http://www.eprc.or.ug
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
- Deardorff, A.V., 1995.
"Determinants of Bilateral Trade : Does Gravity Work in a Neoclassical World?,"
95-05, Michigan - Center for Research on Economic & Social Theory.
- Alan Deardorff, 1998. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," NBER Chapters, in: The Regionalization of the World Economy, pages 7-32 National Bureau of Economic Research, Inc.
- Alan V. Deardorff, 1995. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," NBER Working Papers 5377, National Bureau of Economic Research, Inc.
- Sayeeda Bano, 2002. "Intra-Industry Trade and Trade Intensities: Evidence from New Zealand," Working Papers in Economics 02/05, University of Waikato, Department of Economics.
- Kanta Marwah & Lawrence Klein, 1995. "The Possibility of Expanding Asia-Pacific Economic Integration," Carleton Economic Papers 95-03, Carleton University, Department of Economics, revised Sep 1995.
- Aitken, Norman D, 1973. "The Effect of the EEC and EFTA on European Trade: A Temporal Cross-Section Analysis," American Economic Review, American Economic Association, vol. 63(5), pages 881-892, December.
- Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann, 2003. "Augmented Gravity Model: An Empirical Application to Mercosur-European Union Trade Flows," Journal of Applied Economics, Universidad del CEMA, vol. 6, pages 291-316, November.
- László Mátyás & László Kónya & Mark N. Harris, 2000. "Modelling Export Activity of Eleven APEC Countries," Melbourne Institute Working Paper Series wp2000n05, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
- Swapan K. Bhattacharya & Biswanath Bhattacharyay, 2007. "Gains and Losses of India-China Trade Cooperation – a Gravity Model Impact Analysis," CESifo Working Paper Series 1970, CESifo Group Munich.
- Yeats, Alexander J., 1998. "What can be expected from African regional trade arrangements? some empirical evidence," Policy Research Working Paper Series 2004, The World Bank.
- Jonathan Eaton & Samuel Kortum, 2002. "Technology, Geography, and Trade," Econometrica, Econometric Society, vol. 70(5), pages 1741-1779, September.
- Harris, M.N. & Matyas, L., 1996. "A Comparative Analysis of Different Estimatiors for Dynamic Panel data Models," Monash Econometrics and Business Statistics Working Papers 4/96, Monash University, Department of Econometrics and Business Statistics.
- Kanata Marwah, 1995. "Shifts in the Multilateral Trade Structure of Canada and India: Market Shares, Trade Entropy and Growth," Carleton Economic Papers 95-05, Carleton University, Department of Economics, revised 1997.
When requesting a correction, please mention this item's handle: RePEc:ags:eprcrs:150227. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.