Communication costs and trade in Sub-Saharan Africa

Evans Mupela () and Adam Szirmai
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Evans Mupela: WSU, UNU-MERIT/MGSoG

No 2012-060, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: This paper investigates the effects of connectivity charges (communication costs) on bilateral exports in Sub Saharan Africa (SSA). Data from 19 exporter countries was used together with communication costs data in a gravity model of trade setup. The export data derive from the IMF Direction of Trade and the COMTRADE databases, while the communication cost data was collated from a variety of sources including direct contact with service providers. We find that communication cost is an important factor in bilateral trade in the region. Communications have a significant negative effect on export intensity. The study also reveals that countries with high communication costs generally have lower export intensity than countries with low communication costs. The results suggest that investment in ICT infrastructure that brings down international communication costs will have a positive effect on regional trade in the long run.

Keywords: Trade; gravity model; communication cost; connectivity; export (search for similar items in EconPapers)
JEL-codes: F15 F43 O25 O41 O43 O47 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2012060

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