Exchange rate undervaluation and African surges: what do we learn from exported products?

Camille da Piedade, Luc Jacolin and Patrick Plane

Working papers from Banque de France

Abstract: We investigate the role of undervaluation of African currencies in export surges of some primary and manufactured goods. We calculate country-product specific misalignments on the basis of the absolute purchasing power parity principle adjusted for the productivity level. Using a panel of 41 African countries and a basket of 149 primary and manufactured exported goods (4-digit HS code), we identify 96 export surges over the period 1995-2017. The complementary log-log (cloglog), which more appropriately treats rare events, brings to light undervaluation as an influential determinant for triggering an export surge then sustaining it over time. This effect is controlled for relevant covariates. Results prove robust to alternative calculations of export surges and to different estimators used in regression analyses.

Keywords: Exports Surges; Competitiveness; Exchange Rate Misalignements; Developing Countries (search for similar items in EconPapers)
JEL-codes: F14 O24 O55 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2022
New Economics Papers: this item is included in nep-afr and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:879

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