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Import demand behavior in Africa: Some new evidence

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  • Arize, Augustine C.
  • Nippani, Srinivas

Abstract

Some African economies have experienced increases in the level of their foreign exchange reserves as well as increases in their import volume. Theory suggests that as the level of exchange reserves increases, it may affect the demand for imports since more funds will be available for imports. This paper examines import demand behavior in three African economies, namely Kenya, Nigeria and South Africa. An empirical analysis of import demand behavior is presented, based on the dynamic error-correction model, which allows an explicit parameterized division of effects into long-run influences, short-term adjustment and error-correction term. It uses econometric techniques organized around Johansen and Harris-Inder cointegration analyses; fully modified OLS, dynamic OLS and non-linear OLS to estimate long-run import demand functions.

Suggested Citation

  • Arize, Augustine C. & Nippani, Srinivas, 2010. "Import demand behavior in Africa: Some new evidence," The Quarterly Review of Economics and Finance, Elsevier, vol. 50(3), pages 254-263, August.
    • Handle: RePEc:eee:quaeco:v:50:y:2010:i:3:p:254-263
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    2. Arzu Tay Bayramoglu & Deniz Sukruoglu, 2016. "Non-Energy Import Demand Function in Turkey: New Evidence," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 6(12), pages 750-761, December.

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