Gravity Perspective of Trade Realignment: Assessing Chinaâ€™s Engagement in West Africa
Nnanna P. Azu,
Benedette Nneka Okezie and
Global Journal of Emerging Market Economies, 2019, vol. 11, issue 3, 165-182
This article examines the impact of emerging West African trade partnersâ€”China and India with respect to the traditional trade partners. In this regard, we augmented the gravity model and used dummy to capture bilateral trade effects. This allowed trade to be represented from both sides of its occurrenceâ€”import and exportâ€”while also accounting for the percentage increase as well as the volume of trade. Applying poisson pseudo maximum likelihood (PPML) technique, we observed a growth in the coefficient of emerging trading partners concerning China in the import direction and India in the export direction, while that of the traditional trade partners remained positive but decreasing. Therefore, West Africa is witnessing a partial and imperfect realignment of trade with China, predominantly on import. As China continues to provide better prices and aids for trade, merchandise trade activities with the traditional partners may start to negatively impact when competing with emerging China.
Keywords: Gravity; realignment; trade; China; ECOWAS (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:emeeco:v:11:y:2019:i:3:p:165-182
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