EconPapers    
Economics at your fingertips  
 

The Euro and the CFA Franc: Evidence of sectoral trade effects

Inmaculada Martínez-Zarzoso

No 311, Center for European, Governance and Economic Development Research Discussion Papers from University of Goettingen, Department of Economics

Abstract: This paper estimates a gravity model of trade to evaluate the trade effects of the Euro on sectoral trade within the Euro Zone, the CFA Franc Zone and between the Eurozone and the CFA Franc Zone, when CFA countries acquired fixed rates against the non-francophone Eurozone members. The formation of the Eurozone provides a quasi-natural experiment to estimate the effects on trade of fixed exchange rates, since the change in exchange rate regime for CFA countries with all Eurozone countries but France was not trade related. This is tested using sectoral trade data for 128 countries over the period 1995-2009 and validated using a larger sample of 180 countries over the period 1973 -2013. The main departure from Frankel (2008), is the use of sectoral trade and the inclusion of bilateral-sectoral fixed effects as well as controls for multilateral resistance, namely time varying country-fixed-effects for exporters and importers, in the gravity model specification. The main results indicate that the introduction of the Euro is generally not associated with positive effects for average trade flows between the CFA Franc Zone and other Eurozone countries. However, the results differ by sector and we find that agricultural (homogeneous products) exports from CFA countries to Euro adopters increased by almost fifty (thirty) percent after the euro adoption.

Keywords: CFA; Euro Effect; Bilateral Trade; Panel Data (search for similar items in EconPapers)
JEL-codes: F10 F14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/157628/1/886060125.pdf (application/pdf)

Related works:
Journal Article: The Euro and the CFA Franc: Evidence of Sectoral Trade Effects (2019) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:cegedp:311

Access Statistics for this paper

More papers in Center for European, Governance and Economic Development Research Discussion Papers from University of Goettingen, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().

 
Page updated 2019-12-04
Handle: RePEc:zbw:cegedp:311