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Exporters in Africa: What Role for Trade Costs?

Helena Afonso and Sebastián Vergara Marezco ()

Working Papers from United Nations, Department of Economics and Social Affairs

Abstract: This paper investigates the role of trade costs in exporter dynamics in Africa. In comparison to exporters from other regions, African exporting firms are fewer, smaller and relatively less diversified in terms of products and destinations. African countries also display the highest rates of entry, exit and turnover of exporting firms, exporting products and export destinations. This suggests that Africa’s exporting activity is volatile and subject to a lot of experimentation, with exporters having difficulties in maintaining trade relationships. The analysis also confirms that trade costs are a crucial factor in explaining exporter performance in Africa vis-à-vis other regions, but also among African countries. Trade costs play a disproportionate role in affecting the size of new exporters and the survival of exporters in Africa in comparison to other regions. Also, trade costs differences across African countries are a relevant factor in explaining the lower market diversification of exporters from landlocked countries. A key implication is that the African Continental Free Trade Agreement can entail large benefits in the medium-term, especially in terms of export flows and destination markets. Yet, the diversification of export products will likely remain limited without strengthening productive capacities.

Keywords: Trade costs; exporters dynamics; Africa (search for similar items in EconPapers)
JEL-codes: F14 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2020-06
New Economics Papers: this item is included in nep-afr and nep-int
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http://www.un.org/esa/desa/papers/2020/wp168_2020.pdf (application/pdf)

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Working Paper: Exporters in Africa: What Role for Trade Costs? (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:une:wpaper:168

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