Violence, Political Instability, and International Trade: Evidence from Kenya’s Cut Flower Sector
26 Pages Posted: 22 Nov 2011
Date Written: October 1, 2011
We assess whether and how violence and political instability affect trade between developed and developing countries considering the special case of EU imports of Kenyan roses after the 2007/08 post-election violence and political instability in Kenya. Using the Rotterdam model to estimate EU demand for roses from Kenya and other global competitors, we find evidence of a structural change in the import growth rate for Kenya, approximately equivalent to an 18.6% tariff. These results highlight the importance of non-tariff barriers to trade and contribute to the growing literature on the role of insecurity and instability in hindering international trade.
Keywords: Kenya, Africa, EU, election violence, cut flowers, roses, imports, international trade
JEL Classification: F14, F23, F59, O13, Q17
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