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The Effects of Conflict on Trade: Do Internal Conflicts Impede Shifts to Manufacturing and Technology Transfer?

John Verner () and Matthew Clance
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John Verner: University of Pretoria

A chapter in The Palgrave Handbook of Africa’s Economic Sectors, 2022, pp 1063-1102 from Springer

Abstract: Abstract This chapter adds to the literature on the relationship between trade and conflict by examining the impact of internal conflicts on trade structure. Two hypotheses are tested: (1) internal conflicts impede a shift to manufacturing (as measured by higher technology exports) and (2) internal conflicts reduce the willingness to send complex goods to countries experiencing conflict. The analysis uses geo-referenced conflict data for over 100 developing countries during the period 1989–2014. A subsample is then used to investigate the African continent. Internal conflicts are found to reduce exports and impede shifts to manufacturing in Africa. Evidence that internal conflicts reduce imports is strong and suggest conflicts impede technology transfer in developing countries. The results suggest achieving domestic stability would boost development.

Keywords: Conflict; Trade; Globalization; Economic development; Technological change; F63; F14; C31; C33 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/978-3-030-75556-0_42

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