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Transnational Trade In Ecowas: Does Export Content Matter?

  • Ogundipe, Adeyemi
  • Amaghionyeodiwe, Lloyd

In spite of the vast deposit of resources and human endowments in ECOWAS region, gains from trade have really been marginal in the region. ECOWAS members have poor performance in export of dynamic products; they remained commodity dependent in its exports, leading to transfer of economic gains across border. Over 90% of the region’s export is primary products with very little value-added which accentuated from commodity price and demand inelasticity resulting in terms of trade losses and volatile foreign earnings. Based on these facts, the study tries to investigate the impact of export diversification and composition on GDP growth and GDP per capita respectively. This was achieved using econometric analyses involving co-integration technique and a panel least square technique for the period of 1975-2009 and 1990-2007 respectively in 15 ECOWAS states. The study was deemed significant, as export diversification and manufacturing value-added index induced a positive and significant impact on per capita income growth. The study found high skewness of ECOWAS to commodity export in the period observed but a vertical diversification of product base would emanates more spill-over and surplus gains from the regions endowments. The conclusive finding centred on that fact that it is not how much that is exported that matters but very important is what is exported as regions with less specialization and more diversified exports generally experienced higher economic growth rates and contributed much more to overall exports. Notable recommendation for ECOWAS policy makers is the need to develop domestic processing capability and see export as originating from domestic sufficiency.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 51617.

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Date of creation: 14 Nov 2013
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Handle: RePEc:pra:mprapa:51617
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  1. Alberto Amurgo-Pacheco, Martha Denisse Pierola, 2007. "Patterns of export diversification in developing countries: intensive and extensive margins," IHEID Working Papers 20-2007, Economics Section, The Graduate Institute of International Studies, revised Jul 2007.
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  8. Jean Imbs & Romain Wacziarg, 2003. "Stages of Diversification," American Economic Review, American Economic Association, vol. 93(1), pages 63-86, March.
  9. Nasiruddin Ahmed, 2000. "Export response to trade liberalization in Bangladesh: a cointegration analysis," Applied Economics, Taylor & Francis Journals, vol. 32(8), pages 1077-1084.
  10. Wei Liao & Kang Shi & Zhiwei Zhang, 2010. "Vertical Trade and China's Export Dynamics," Working Papers 102010, Hong Kong Institute for Monetary Research.
  11. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
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  13. Santos-Paulino, Amelia U., 2008. "Export Productivity and Specialization in China, Brazil, India and South Africa," Working Paper Series RP2008/28, World Institute for Development Economic Research (UNU-WIDER).
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