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South – South Trade: Geography Matters

  • Souleymane Coulibaly
  • Lionel Fontagné

Intra-subsaharan African trade appears to be very limited, an outcome that is often justified on the grounds of the size of the exporting and the importing economies. If that were the explanation, there would be no untapped trade potential. We argue instead that the main determinant of this 'missing trade' is geography. Being landlocked (and poor) translates into very high trade costs. In this paper, we try to measure the impact of geographical impediments on South--South trade. We focus on the intra and extra regional trade of the countries belonging to the West African Economic and Monetary Union, which have been involved in an integration process since the early days of their independence. We derive and estimate an Armington-based model highlighting the impact of geography and infrastructures on bilateral trade flows within this region. Copyright 2006, Oxford University Press.

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Paper provided by CEPII research center in its series Working Papers with number 2004-08.

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Date of creation: Jul 2004
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Handle: RePEc:cii:cepidt:2004-08
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  1. Agnès Bénassy-Quéré & Maylis Coupet, 2005. "On the Adequacy of Monetary Arrangements in Sub-Saharan Africa," The World Economy, Wiley Blackwell, vol. 28(3), pages 349-373, 03.
  2. Douglas Staiger & James H. Stock, 1994. "Instrumental Variables Regression with Weak Instruments," NBER Technical Working Papers 0151, National Bureau of Economic Research, Inc.
  3. J. Vernon Henderson, Zmarak Shalizi, and Anthony J. Venables, 2001. "Geography and development," Journal of Economic Geography, Oxford University Press, vol. 1(1), pages 81-105, January.
  4. Havrylyshyn, Oli, 1985. "The direction of developing country trade : Empirical evidence of differences between South-South and South-North trade," Journal of Development Economics, Elsevier, vol. 19(3), pages 255-281, December.
  5. Lionel Fontagné & Michaël Pajot & Jean-Michel Pasteels, 2002. "Potentiels de commerce entre économies hétérogènes : un petit mode d’emploi des modèles de gravité," Économie et Prévision, Programme National Persée, vol. 152(1), pages 115-139.
  6. Foroutan, Faezeh & Pritchett, Lant, 1993. "Intra - Sub - Saharan African trade : is it too little?," Policy Research Working Paper Series 1225, The World Bank.
  7. Stephen Redding & Anthony J. Venables, 2001. "Economic Geography and International Inequality," International Trade 0103003, EconWPA.
  8. Keith Head & Thierry Mayer, 2000. "Non-Europe : The Magnitude and Causes of Market Fragmentation in the EU," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00267441, HAL.
  9. Lionel Fontagné & Michaël Freudenberg & Nicolas Peridy, 1997. "Trade Patterns Inside the Single Market," Working Papers 1997-07, CEPII research center.
  10. Limao, Nuno & Venables, Anthony J., 1999. "Infrastructure, geographical disadvantage, and transport costs," Policy Research Working Paper Series 2257, The World Bank.
  11. Jeffrey D. Sachs, 2001. "Tropical Underdevelopment," NBER Working Papers 8119, National Bureau of Economic Research, Inc.
  12. Greenaway, David & Milner, Chris R, 1990. "South-South Trade: Theory, Evidence, Policy," World Bank Research Observer, World Bank Group, vol. 5(1), pages 47-68, January.
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