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South-South Trade : Geography Matters

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Abstract

Intra-sub-Saharan African trade appears to be very low, 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 in order to evaluate the impact of geographical impediments on bilateral trade flows within this region. We alternatively and simultaneously use COMTRADE and West African Economic and Monetary Union data to perform these estimations.

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  • Souleymane Coulibaly & Lionel Fontagné, 2004. "South-South Trade : Geography Matters," Cahiers de la Maison des Sciences Economiques bla04041, Université Panthéon-Sorbonne (Paris 1).
  • Handle: RePEc:mse:wpsorb:bla04041
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    Cited by:

    1. James Feyrer, 2009. "Distance, Trade, and Income - The 1967 to 1975 Closing of the Suez Canal as a Natural Experiment," NBER Working Papers 15557, National Bureau of Economic Research, Inc.
    2. Craig Macphee & Peter Cook & Wanasin Sattayanuwat, 2013. "Transportation and The International Trade of Eastern and Southern Africa," South African Journal of Economics, Economic Society of South Africa, vol. 81(2), pages 225-239, June.
    3. James Feyrer, 2009. "Trade and Income -- Exploiting Time Series in Geography," NBER Working Papers 14910, National Bureau of Economic Research, Inc.
    4. Shepherd, Ben & Wilson, John S., 2006. "Road infrastructure in Europe and Central Asia : does network quality affect trade ?," Policy Research Working Paper Series 4104, The World Bank.
    5. de Melo, Jaime & Tsikata, Yvonne, 2014. "Regional integration in Africa: Challenges and prospects," WIDER Working Paper Series 037, World Institute for Development Economic Research (UNU-WIDER).
    6. BESSO, CHRISTOPHE RAOUL & chameni, celestin, 2016. "Analyse De La Vulnerabilite Macroeconomique De La Zone Franc
      [Analysis Of The Macroeconomic Vulnerability Of The Franc Zone]
      ," MPRA Paper 75143, University Library of Munich, Germany.
    7. Brenton, Paul & Portugal-Perez, Alberto & Regolo, Julie, 2014. "Food prices, road infrastructure, and market integration in Central and Eastern Africa," Policy Research Working Paper Series 7003, The World Bank.
    8. Diagne, Mandiaye & Abele, Steffen & Diagne, Aliou & Seck, Papa Abdoulaye, 2012. "Agricultural trade for food security in Africa: A Ricardian model approach," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 123842, International Association of Agricultural Economists.
    9. Adam Storeygard, 2016. "Farther on down the Road: Transport Costs, Trade and Urban Growth in Sub-Saharan Africa," Review of Economic Studies, Oxford University Press, vol. 83(3), pages 1263-1295.
    10. Mustafizur Rahman & Wasel Bin Shadat & Narayan Chandra Das, 2006. "Trade Potential in SAFTA - An Application of Augmented Gravity Model," Trade Working Papers 22296, East Asian Bureau of Economic Research.
    11. Charles Kunaka & Robin Carruthers, 2014. "Trade and Transport Corridor Management Toolkit," World Bank Publications, The World Bank, number 18241.
    12. Prema-chandra Athukorala, 2011. "South-South Trade: An Asian Perspective," Departmental Working Papers 2011-09, The Australian National University, Arndt-Corden Department of Economics.
    13. Wim Naudé, 2011. "Economic Development in Sub-Saharan Africa: The Case of the Big Four," Working Papers 2011/34, Maastricht School of Management.
    14. Celbis, Mehmet Güney & Nijkamp, Peter & Poot, Jacques, 2013. "How big is the impact of infrastructure on trade? Evidence from meta-analysis," MERIT Working Papers 032, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    15. Raihan, Selim, 2014. "South-South Trade: A Quantitative Assessment," MPRA Paper 57776, University Library of Munich, Germany.
    16. Souleymane COULIBALY, 2006. "Persistent Uneven Spread of Economic Activities within Developing RIAs," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 06.01, Université de Lausanne, Faculté des HEC, DEEP.
    17. Villoria, Nelson, 2008. "Estimation of Missing Intra-African Trade," GTAP Research Memoranda 2915, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    18. Lisa Borgatti, 2011. "Economic Integration in Sub-Saharan Africa," Chapters,in: International Handbook on the Economics of Integration, Volume I, chapter 20 Edward Elgar Publishing.

    More about this item

    Keywords

    South-South trade; landlocked; transport infrastructure; border infrastructure.;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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