Market Access, Supplier Access, and Africa's Manufactured Exports: An Analysis of the Role of Geography and Institutions

33 Pages Posted: 20 Apr 2016

See all articles by Ibrahim Elbadawi

Ibrahim Elbadawi

World Bank - Economic Development Institute

Taye Mengistae

World Bank

Albert Zeufack

World Bank

Date Written: June 1, 2006

Abstract

In a large cross-country sample of manufacturing establishments drawn from 188 cities, average exports per establishment are smaller for African firms than for businesses in other regions. The authors show that this is mainly because, on average, African firms face more adverse economic geography and operate in poorer institutional settings. Once they control for the quality of institutions and economic geography, what in effect is a negative African dummy disappears from the firm level exports equation they estimate. One part of the effect of geography operates through Africa's lower foreign market access: African firms are located further away from wealthier or denser potential export markets. A second occurs through the region's lower supplier access: African firms face steeper input prices, partly because of their physical distance from cheaper foreign suppliers, and partly because domestic substitutes for importable inputs are more expensive. Africa's poorer institutions reduce its manufactured exports directly, as well as indirectly, by lowering foreign market access and supplier access. Both geography and institutions influence average firm level exports significantly more through their effect on the number of exporters than through their impact on how much each exporter sells in foreign markets.

Keywords: Free Trade,,Markets and Market Access, Economic Theory & Research, Access to Markets, Foreign Direct Investment

Suggested Citation

Elbadawi, Ibrahim and Mengistae, Taye Alemu and Zeufack, Albert, Market Access, Supplier Access, and Africa's Manufactured Exports: An Analysis of the Role of Geography and Institutions (June 1, 2006). World Bank Policy Research Working Paper No. 3942. Available at SSRN: https://ssrn.com/abstract=923249

Ibrahim Elbadawi (Contact Author)

World Bank - Economic Development Institute ( email )

1818 H Street
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/ielbadawi

Taye Alemu Mengistae

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Albert Zeufack

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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