Browsing by Author "Kassaye, Eden"

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    Trade among COMESA Countries: A Gravity Approach
    (Addis Ababa University, 2008-06) Kassaye, Eden; Mengistu, Molla (PhD)
    This study aimed at examining whether Common Market for Eastern and Southern Africa (COMESA) is effective in promoting trade among its member states. The study uses gravity model to estimate the trade intensity among its members for the year 1981 and 1999. The gravity model is applied to trade intensity indices and the estimation of the gravity equation is carried out using Tobit regression. The empirical results indicate that the standard gravity model variables have the expected effect on the trade linkage in COMESA. The main focus of the study is, on the estimation of COMESA, which is found to be insignificant in promoting trade among members. A comparison of the two periods result reveals a very similar pattern before and after the formation of COMESA. Thus, the result confirms the ineffectiveness of COMESA in enlarging trade among its members. Accordingly, the study suggests the requirement of joint effort of the member countries in coordinating, harmonizing and implementing policies, improving their human and institutional capabilities, increasing production capacity and expanding markets by involving active participation of the private sector so as to raise intra-COMESA trade. Key words: COMESA, Gravity Model, Trade Intensity Index, Regional Trade Agreements