Department of Economics and Business Economics

Economic Diplomacy in Africa: The Impact of Regional Integration versus Bilateral Diplomacy on Bilateral Trade

Research output: ResearchWorking paper

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The paper examines the impact of two main instruments of economic diplomacy — regional integration and commercial diplomacy on export flows among African states. We test whether there is any evidence of a trade-off or complementary interaction between these two instruments in trade facilitation. We compare the effects of these two instruments of economic diplomacy on bilateral trade by employing a gravity model for 45 African states over the period 1980-2005. The results show that bilateral diplomatic exchange is a relatively more significant determinant of bilateral exports among African states compared to regional integration. We also find a nuanced interaction between these two instruments of economic diplomacy: the trade–stimulating effect of diplomatic exchange is less pronounced among African countries that shared membership of the same regional bloc. Generally, this could mean that there exists a trade-off between regional integration and commercial diplomacy in facilitating exports or a lack of complementarity between these two instruments of economic diplomacy.
Original languageEnglish
Place of PublicationAarhus
PublisherInstitut for Økonomi, Aarhus Universitet
Number of pages34
StatePublished - 18 Aug 2016
SeriesEconomics Working Papers
Number2016-09

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