Discussion Paper

No. 2018-75 | October 11, 2018
The impacts of institutional quality and infrastructure on overall and intra-Africa trade

Abstract

The authors examine the impacts of quality of institutions, border and transport efficiency, physical and communication infrastructure on overall and intra-Africa trade covering 44 African countries and their 173 trade partners for the periods 2000–2014. Aggregate indicators are derived for quality of economic institutions, border and transport efficiency, physical and communication infrastructure using principal component analysis. The findings disclose that intra-Africa and overall Africa’s trade robustly determined by quality of institutions, border and transport efficiency, physical and communication infrastructure. The estimates also indicate that the marginal effect of the quality of institutions, physical and communication infrastructure on trade flow appears to be increasing in GDP per capita. In contrast, the marginal effect of border and transport efficiency on trade decreases in GDP per capita. The authors compute simulation of improving each indicator to the best performer in the sample. The findings are robust to estimation method conducted to account for potential endogeneity.

Data Set

JEL Classification:

F1, F14

Assessment

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Links

Cite As

Yushi Jiang and Dinkneh Gebre Borojo (2018). The impacts of institutional quality and infrastructure on overall and intra-Africa trade. Economics Discussion Papers, No 2018-75, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2018-75


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