Communication costs and trade in Sub-Saharan Africa

Mupela, Evans and Szirmai, Adam (2012). Communication costs and trade in Sub-Saharan Africa. UNU-MERIT.

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  • Author Mupela, Evans
    Szirmai, Adam
    Title Communication costs and trade in Sub-Saharan Africa
    Publication Date 2012
    Publisher UNU-MERIT
    Abstract This paper investigates the effects of connectivity charges (communication costs) on bilateral exports in Sub Saharan Africa (SSA). Data from 19 exporter countries was used together with communication costs data in a gravity model of trade setup. The export data derive from the IMF Direction of Trade and the COMTRADE databases, while the communication cost data was collated from a variety of sources including direct contact with service providers. We find that communication cost is an important factor in bilateral trade in the region. Communications have a significant negative effect on export intensity. The study also reveals that countries with high communication costs generally have lower export intensity than countries with low communication costs. The results suggest that investment in ICT infrastructure that brings down international communication costs will have a positive effect on regional trade in the long run.
    UNU Topics of Focus Trade
    Keyword Trade
    Gravity model
    Communication cost
    Connectivity
    Export
    JEL O25
    041
    O43
    O47
    F15
    F43
    Copyright Holder UNU-MERIT
    Copyright Year 2012
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    Created: Wed, 11 Dec 2013, 16:14:35 JST