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Regional Integration: Do intra-African trade and migration improve income in Africa?

Blaise Gnimassoun ()

No 2018-9, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: Regional integration in Africa is a subject of great interest, but its impact on income has not been studied sufficiently. Using cross-sectional and panel estimations, this paper examines the impact of African integration on real per capita income in Africa. To do this, we consider intra-African trade and migration flows as quantitative measures reflecting the intensity of regional integration. In order to address the endogeneity concerns, we use a gravity-based IV strategy. Our results show that, from a long-term perspective, African integration has not been strong enough to generate a positive, significant and robust impact on real per capita income in Africa. However it appears to be significantly income-enhancing in the short term but only through inter-country migration. These results are robust to a wide range of specifications. Further analysis shows that economic diversification, financial development and the quality of transport and telecommunication infrastructure significantly affect the impact of intra-African trade on per capita income. Their improvement would make intra-African trade income-improving. Our policy recommendations have been formulated in this direction.

Keywords: Income per Capita; Trade; International Migration; Economic Integration; Africa. (search for similar items in EconPapers)
JEL-codes: E64 F14 F22 F15 O55 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int and nep-mig
Date: 2018
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