IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Trade and Growth: Is Sub-Saharan Africa Different

  • Vincent Leyaro
  • Oliver Morrissey
Registered author(s):

    This paper argues that SSA has derived a minimal growth benefit from trade because of what it exports and that the detrimental effect of primary commodity export dependence on SSA growth can be captured by two structural variables, natural barriers to trade (NBT, trade costs) and natural resource endowments (NRE, primary commodity dependence). The analysis is based on a large panel of developing countries for 1970 to 2008 and explicitly tests for threshold effects in the structural variables. We find that high trade costs and natural resource endowments have a negative effect on growth and that the combination of these two factors accounts for the SSA dummy: SSA countries tend to have high values of NRE and NBT and this helps to explain why SSA countries experienced lower growth than other developing countries (the significant negative dummy for SSA). The trade variables also performed as expected. Exports and trade openness generally contribute to growth, but their effect on growth is affected by the structural variables; specifically high values as observed in SSA dampen the positive impact of trade on growth. The poor growth of SSA relative to other regions is largely accounted for by the combination of natural resource endowments and high transport costs so that the dependence on primary commodity exports has not supported growth.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.nottingham.ac.uk/credit/documents/papers/10-04.pdf
    Download Restriction: no

    Paper provided by University of Nottingham, CREDIT in its series Discussion Papers with number 10/04.

    as
    in new window

    Length:
    Date of creation:
    Date of revision:
    Handle: RePEc:not:notcre:10/04
    Contact details of provider: Postal: School of Economics University of Nottingham University Park Nottingham NG7 2RD
    Phone: (44) 0115 951 5620
    Fax: (0115) 951 4159
    Web page: http://www.nottingham.ac.uk/economics/

    More information through EDIRC

    References listed on IDEAS
    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.:

    as in new window
    1. Xavier Sala-I-Martin, 1997. "Transfers, Social Safety Nets, and Economic Growth," IMF Staff Papers, Palgrave Macmillan, vol. 44(1), pages 81-102, March.
    2. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    3. Greenaway, David & Morgan, Wyn & Wright, Peter, 2002. "Trade liberalisation and growth in developing countries," Journal of Development Economics, Elsevier, vol. 67(1), pages 229-244, February.
    4. Robert J. Barro, 2012. "Inflation and Economic Growth," CEMA Working Papers 568, China Economics and Management Academy, Central University of Finance and Economics.
    5. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
    6. Grier, Kevin B. & Tullock, Gordon, 1989. "An empirical analysis of cross-national economic growth, 1951-1980," Journal of Monetary Economics, Elsevier, vol. 24(2), pages 259-276, September.
    7. Martin, Philippe & Rogers, Carol Ann, 1997. "Stabilization Policy, Learning-by-Doing, and Economic Growth," Oxford Economic Papers, Oxford University Press, vol. 49(2), pages 152-66, April.
    8. repec:chb:bcchwp:03 is not listed on IDEAS
    9. Abigail Barr, 1995. "The missing factor: entrepreneurial networks, enterprises and economic growth in Ghana," Economics Series Working Papers WPS/1995-11, University of Oxford, Department of Economics.
    10. Jagdish N. Bhagwati, 1978. "Anatomy and Consequences of Exchange Control Regimes," NBER Books, National Bureau of Economic Research, Inc, number bhag78-1, August.
    11. Robert E. Baldwin, 2004. "Openness and Growth: What's the Empirical Relationship?," NBER Chapters, in: Challenges to Globalization: Analyzing the Economics, pages 499-526 National Bureau of Economic Research, Inc.
    12. Caner, Mehmet & Hansen, Bruce E., 2004. "Instrumental Variable Estimation Of A Threshold Model," Econometric Theory, Cambridge University Press, vol. 20(05), pages 813-843, October.
    13. Jean–paul Azam & Augustin Fosu & Njuguna Ndung’u, 2002. "Explaining Slow Growth in Africa," African Development Review, African Development Bank, vol. 14(2), pages 177-220.
    14. Wood, Adrian & Mayer, Jorg, 2001. "Africa's Export Structure in a Comparative Perspective," Cambridge Journal of Economics, Oxford University Press, vol. 25(3), pages 369-94, May.
    15. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. " Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-89, September.
    16. Jagdish N. Bhagwati, 1978. "Appendix to "Anatomy and Consequences of Exchange Control Regimes"," NBER Chapters, in: Anatomy and Consequences of Exchange Control Regimes, pages 219-221 National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:not:notcre:10/04. 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: (Hilary Hughes)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.