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Absorptive Capacity and Export Diversification in Sub-Saharan African Countries

Author

Listed:
  • Habiyaremye, Alexis

    (UNU-MERIT)

  • Ziesemer, Thomas

    (UNU-MERIT)

Abstract

This paper examines the extent to which dependence on primary commodities in Sub-Saharan African(SSA) countries can be explained by low levels of absorptive capacity (the ability to acquire, internalize and utilize knowledge developed elsewhere). We examine the individual and combined effects of various indicators of absorptive capacity on export diversification. We test the significance of these effects on a sub-sample consisting of SSA countries and a sample of other developing countries. Our results show that the association between higher levels human capital and basic infrastructure -two crucial components of absorptive capacity -with more export diversification is subject to threshold level effects, while the abundance of natural resources turns out to be impeding diversification in SSA. These results imply that SSA countries need to substantially increase their investments in basic infrastructure as well as reinforce the accumulation pace of human and physical capital to allow active technological learning and reduce their dependence on primary commodities.

Suggested Citation

  • Habiyaremye, Alexis & Ziesemer, Thomas, 2006. "Absorptive Capacity and Export Diversification in Sub-Saharan African Countries," MERIT Working Papers 2006-030, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2006030
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    File URL: https://www.merit.unu.edu/publications/wppdf/2006/wp2006-030.pdf
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    Citations

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    Cited by:

    1. Alain Nurbel & Ibrahim Ahamada, 2008. "Investissements directs étrangers entrants et développement : l'enjeu de la capacité d'absorption," Mondes en développement, De Boeck Université, vol. 0(3), pages 79-96.
    2. Bhushan Praveen Jangam & Vaseem Akram, 2020. "Does financial integration drive export diversification? Evidence from a cross-country analysis," Journal of Financial Economic Policy, Emerald Group Publishing, vol. 13(1), pages 45-61, April.
    3. Ricardo Arguello, 2017. "Trade diversification in Colombia, 1991-2011," Revista Cuadernos de Economía, Universidad Nacional de Colombia -FCE - CID, vol. 36(71), pages 345-378, July.
    4. World Bank, 2007. "Ghana - Meeting the Challenge of Accelerated and Shared Growth : Country Economic Memorandum, Volume 1. Background Papers," World Bank Publications - Reports 7661, The World Bank Group.
    5. Mina Baliamoune-Lutz, 2011. "Growth by Destination (Where You Export Matters): Trade with China and Growth in African Countries," African Development Review, African Development Bank, vol. 23(2), pages 202-218.
    6. Chandra, Vandana & Osorio Rodarte, Israel, 2007. "Options for Export Diversification and Faster Export Growth in Ghana," MPRA Paper 18539, University Library of Munich, Germany.
    7. Thomas H.W. Ziesemer, 2014. "Country terms of trade: trends, unit roots, over-differencing, endogeneity, time dummies, and heterogeneity," International Review of Applied Economics, Taylor & Francis Journals, vol. 28(6), pages 767-796, September.
    8. Jonathan Munemo, 2011. "Foreign aid and export diversification in developing countries," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 20(3), pages 339-355.
    9. Aye Mengistu, Alemu, 2009. "Determinants of Vertical and Horizontal Export Diversification: Evidences from Sub-Saharan Africa and East Asia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 17(2), pages 107-107, August.
    10. Terheggen, Anne, 2010. "The new kid in the forest: the impact of China's resource demand on Gabon's tropical timber value chain," MPRA Paper 37982, University Library of Munich, Germany.
    11. Brenton, Paul & Hoppe, Mombert, 2007. "Clothing and export diversification : still a route to growth for low-income countries ?," Policy Research Working Paper Series 4343, The World Bank.
    12. Dobdinga Cletus Fonchamnyo & Afuge Ramsy Akame, 2017. "Determinants of export diversification in Sub-Sahara African region: a fractionalized logit estimation model," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 41(2), pages 330-342, April.
    13. Yu Ri Kim, 2019. "Does aid for trade diversify the export structure of recipient countries?," The World Economy, Wiley Blackwell, vol. 42(9), pages 2684-2722, September.
    14. Rosdiana Sijabat, 2022. "The Association of Economic Growth, Foreign Aid, Foreign Direct Investment and Gross Capital Formation in Indonesia: Evidence from the Toda–Yamamoto Approach," Economies, MDPI, vol. 10(4), pages 1-22, April.
    15. Iyoboyi, Martins, 2019. "Macroeconomic Analysis of Export Diversification in Nigeria," Empirical Economic Review, Department of Economics and Statistics, Dr Hassan Murad School of Management, University of Management and Technology, Lahore, vol. 2(1), pages 83-116.
    16. World Bank, 2010. "Burkina Faso - Promoting Growth, Competitiveness and Diversification : Country Economic Memorandum, Volume 3. Enhancing Growth Factors," World Bank Publications - Reports 12359, The World Bank Group.
    17. Dang Luu Hai, 2021. "Aid for trade and export sophistication in recipient countries," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 30(4), pages 530-548, May.
    18. Chandra, Vandana & Osorio Rodarte, Israel, 2009. "Options for Income-Enhancing Diversification in Burkina Faso," MPRA Paper 20928, University Library of Munich, Germany.

    More about this item

    Keywords

    absorptive capacity; human capital; capital accumulation; export diversification; Sub-Saharan Africa.;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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