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Communication costs and trade in Sub-Saharan Africa

Author

Listed:
  • Mupela, Evans

    (WSU, UNU-MERIT/MGSoG)

  • Szirmai, Adam

    (UNU-MERIT/MGSoG)

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.

Suggested Citation

  • Mupela, Evans & Szirmai, Adam, 2012. "Communication costs and trade in Sub-Saharan Africa," MERIT Working Papers 2012-060, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2012060
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    File URL: https://unu-merit.nl/publications/wppdf/2012/wp2012-060.pdf
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    References listed on IDEAS

    as
    1. Brezis, Elise S & Krugman, Paul R, 1997. "Technology and the Life Cycle of Cities," Journal of Economic Growth, Springer, vol. 2(4), pages 369-383, December.
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    More about this item

    Keywords

    Trade; gravity model; communication cost; connectivity; export;
    All these keywords.

    JEL classification:

    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • F15 - International Economics - - Trade - - - Economic Integration
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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