Trade openness : an African perspective : examining the determinants of trade openness and bilateral trade flows for the African countries

Mbogela, Cosmas Simon

March 2015

Thesis or dissertation

© 2015 Cosmas Simon Mbogela. All rights reserved. No part of this publication may be reproduced without the written permission of the copyright holder.

This research entails an empirical examination of the determinants of trade openness in Africa and the determinants of bilateral trade flows between Africa and the BRIC and OECD member countries. Besides, the study examines the impacts of trade openness on the economic growth in Africa. Before all this is done, the study surveys the updated empirical data on the African economy and trade to give a state of the art on the economic development processes in the African continent. Recognising the role of international trade in the global economic growth and considering the marginalisation of Africa in the world trade, this study highlighting important factors that are relevant for policy makers in the African countries to consider in order to boost-up their trade levels. It is also an attempt to empirically examine and provide explanations on the relatively lower trade levels that these countries have been experiencing ever since their political independence.

The study has been done with panel data analysis methods in order to capture the relationships between the variables of interest over an extended time periods and disentangle the time invariant country specific effects that are very relevant particularly in examining bilateral trade flows. Econometric estimations of the coefficients for the regressors were made through the application of either random effects or fixed effects models, a selection of which is based on Hausman test. Where necessary the study has made use of instrumental variable estimation techniques like the 2SLS, Hausman Taylor and System GMM.

Among others, this research contributes to the existing literature by examining the importance of private sector and the role of the ever- increasing mobile phone subscriptions in the African countries, in enhancing intra African bilateral trade flows. The facilitation of the private sector through provision of credits can enhance intra and inter African trade as well as boosting up the efforts to diversify African exports composition and export market destinations.

Business School, The University of Hull
Abbott, A. J. (Andrew J.); Swaray, Raymond
Sponsor (Organisation)
Mzumbe University
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