Intra-african Trade Obstacles: the Role of Business Environment

Bruno Powo Fosso (Glendon College, York University)

Abstract: This paper analyzes the relationship between business environment and trade in Africa. The business environment indicators include the number of documents (days) to export and import; number of procedures (days) to starting a business, registering a property, enforcing contract; investor's protection index; ports efficiency; and services infrastructure. We estimate a modified gravity equation, controlling for heterogeneity and shocks. The results suggest that both imports and exports for a country would increase with the improvements of the investor's protection and the reduction of the number of days to starting a business, enforcing a contract and registering a property. But the required number of procedures to starting a business, enforcing a contract, and registering a property would reduce trade. The results also show that the required number of documents (days) to export and import has a negative effect on trade. Ports efficiency and services infrastructure for the exporter and importer countries are positively related to trade.


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