Department of Economics and Business Economics

Revisiting the effect of regional integration on African trade: evidence from meta-analysis and gravity model

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  • Sylvanus Kwaku Afesorgbor, European Univ Inst, European University Institute, Robert Schuman Ctr Adv Studies

Two main shortcomings flaw the estimation of gravity model in previous studies that examined the trade-creating effects of African Regional Trade Agreements (RTAs). First, these studies fail to account for the multilateral resistance term. This omission makes the estimates from standard gravity model bias and inconsistent. Second, there is a significant proportion of zero trade flows, however, these studies also fail to account for them properly. They use either the Tobit model or replace zero flows with arbitrary small values. Apart from these problems, they also exhibit considerable heterogeneity in the RTA effects on trade. In this paper, a meta-analysis of previous empirical studies is conducted to derive a combined effect size and also to explain the heterogeneity. In addition, I use the gravity model to compare the trade-creating effect of the main African RTAs. Using the gravity model, I compare the estimation methods of previous studies to the Poisson pseudo-maximum-likelihood estimator that tackles the zero flows. From the meta-analysis, I find a general positive effect of African RTAs of about 27%-32%. A comparative assessment of the RTAs using gravity model shows a striking heterogeneity.

Original languageEnglish
JournalJournal of International Trade and Economic Development
Volume26
Issue2
Pages (from-to)133-153
Number of pages21
ISSN0963-8199
DOIs
Publication statusPublished - 2017

    Research areas

  • Africa, regional integration, regional trade, meta-analysis, gravity model, ECONOMIC-INTEGRATION, INTERNATIONAL-TRADE, AGREEMENTS, LOG, HETEROGENEITY, ECOWAS, IMPACT, COMESA

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