Browsing by Author "Getachew Gezahegn, Mahlet"

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    The Determinants of Sub-Saharan Africa's (SSA) Bilateral Trade with the North: A Gravity Model Approach
    (A.A.U, 2009-06) Getachew Gezahegn, Mahlet; Estiphanas, Gi nna (Dr)
    This paper attempts to assess the determinants of SSA 's bilateral trade with the North . In this regard, an a ugment ed gravity model has been specifi ed to annual imports of SSA cOllnt ries from the industrial countri es. The model is tested for a sample of 35 countries. 27 SSA and 8 industrial countri es over the period 1995-2007. In the model, the bil ateral import is a linear fun c tion of economic s ize, popu lation of the country, per capita income and geograph ical diffe rence and hi stori cal dummies. Specifically, SSA bilateral import is pos iti ve ly determined by the s ize of econo mies (GOP of the importing and exporting country), lin guist ic and hi stori ca l ties. Infras tru cture indexes which are augmented as a proxy for public infrastruc tu res have a lso a positive influence. On th e other hand, transportation cost proxied by geogra ph ical di stance and country's access to sea are found to have a negati ve influence on SSA bila teral import . Likewise, the coeffici ent of per capita GOP differential between these countries has a negati ve s ign indi cating that the Linder e ffect dominates the H-O hypothesis in the case of north - SSA trade fl ows. The impli ca tion of these res ul ts is that all kinds of barriers to trade must be li berali zed to a greater ex ten t to e nh ance SSA's bi lateral trade. Since one of the main probl ems of Sub Saharan African trade is transport infrastructure network, improvement in infrast ructure may be a pre- req ui site for successful trade fl ows. A further study is a lso advised to investi gate manufac tu ring and non-manufacturing trade flows separate ly since they have di ffe rent tre nd s.