Impacts of Regional Trade Agreement on Agricultural Products in Africa: Panel Data Approach
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Date
2012-06
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A.A.U
Abstract
This study examines the effects of regional trade area or free trade area on trade in
agricultural products within intra- COMESA countries and extra-COMESA countries
using a panel data for the period (2001-2010). A panel data framework has many
advantages vis-a.-vis the cross-section approach. It allows to disentangling countryspecific
and time-specific effects. In order to analysis the impacts this study employed
random affects GLS model depending on Hausman test guidance.
The contribution of this study to the literature is that the effects of FT A of COMESA is
positive and as expected and statistically significant .Agricultural trade have been
diverting from former COMESA members and from SADC members to newly established
FT A member countries.
The findings is consistent the theory of Linder hypothesis that large size countries tend to
trade more with large size countries and Heckscher-Ohlin- Samuelson theorem. Most
result of standard variable included in the gravity model is positive as expected and
statistically significant. The results of the study also confirm with the hypothesis that both
FTA and extra-COMES A agricultural trade is positively correlated with the volume of
trade but inversely with SADC and non FTA member COMESA countries.
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Keywords
Gravity model, Agriculture