Intra-African Trade and Spatial Dependence: Revisiting Africa Intra-Trade Determinants with a Spatial Structural Gravity Model
Theoretical Economics Letters
The objective of our paper is to revisit African intra-trade determinants once taking into account potential spatial spillover effect due to the third country dependence. Recently, several studies have shown the importance of taking into account the spatial effect. We examined total exports flows, industrial trade flows and agricultural trade flows of 40 countries in 2002-2018 and we detected a positive spatial autocorrelation and the Spatial Autoregressive gravity model is identified as an
... opriate way to model the spatial dependence. The results show that distance doesn't affect agricultural products trade, institutional factors of destination country and neighboring countries affect intra-African trade. Except SADC area, intra-African trade is largely dominated by agricultural products. To reduce poverty through trade intensification, the regional integration process in Africa must grant an important place to industrialization policies, conflict resolution and strengthening cooperation.