Does trade in services improve African participation in global value chains?

Efogo, Françoise Okah

doi:10.1111/1467-8268.12476

Cited by 10 publications

(8 citation statements)

References 68 publications

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“…On the contrary, increased credit appears to spur TiVA. Okah Efogo (2020b) finds similar results for financial credit when considering countries in sub-Saharan Africa. Following Levine (2005), one possible explanation is misallocation where additional credit is not directed to firms operating in GVCs.…”

Section: Resultssupporting

confidence: 61%

“…In furtherance, a third monetary instrument linked to TiVA is access to credit. Current publications on TiVA demonstrate that financial institutions' credit has ambiguous effects (Okah Efogo, 2020a, b; Allard et al ., 2016; Gereffi and Fernandez-Stark, 2016). Regarding access to credit, a number of rigidities can distort its effectiveness on TiVA intensity in services (Galesi and Rachedi, 2019).…”

Section: A Review Of the Theoretical Literature On Monetary Policy Ef...mentioning

confidence: 99%

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Trade in value-added in developing countries: Does monetary policy matter?

Efogo

Epo

2023

JILT

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PurposeThis paper appraises the effects of monetary policy on trade in value-added (TiVA) using a panel of 38 developing countries spanning the period 1990 to 2019. Specifically, the authors subsequently summon the theory of trade in intermediate products within the New Keynesian framework for open economies that comprises price rigidity to verify this relationship and thereon control for robustness by correcting for endogeneity and unbalanced panel effect.Design/methodology/approachThe authors mobilize the within estimator corrected for cross sectional dependence as well as the two-stage-least squares fixed effect estimator which corrects for endogeneity. For robustness, the authors also use the Hausman–Taylor estimator to control for endogeneity and random effects in annualized data and the least squares dummy variable corrected estimator.FindingsResults suggest that the monetary policy instruments such as inflationary gaps and anticipatory inflationary outcomes significantly affect TiVA in developing countries only in the short term with no long-term effect. In addition to contributing to the scanty empirical literature, the authors provide relevant insights on monetary policy tools that can be mobilized in fashioning a global value chain penetration and upgrading strategies.Originality/valueThe authors convoke the theory of trade in intermediate products casted into the New Keynesian framework comprising price rigidity to verify the relationship between TiVA and monetary policy (b) verify for robustness by correcting for endogeneity and unbalanced panel effect.

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Section: Resultssupporting

confidence: 61%

Section: A Review Of the Theoretical Literature On Monetary Policy Ef...mentioning

confidence: 99%

Trade in value-added in developing countries: Does monetary policy matter?

Efogo

Epo

2023

JILT

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“…The extent to which trade facilitation can stimulate development indicators like foreign direct investment (FDI) motivated the research interest of Ibrahim and Ajide (2021), who found that FDI inflows to Africa are hindered by inefficient TF on the continent. In a similar vein, Okah Efogo (2020) observed that trade in service enhances African engagement in global value chains based on empirical analyses covering 36 economies in SSA from 2000 to 2017. Moreover, the nexus between TF and trade performance constitutes the focus of some studies, such as Fiorini and Hoekman (2018) and Lemi (2017), which lend credence to the significant effects of TF on trade performance.…”

Section: Literature Reviewmentioning

confidence: 87%

Trade facilitation, institutions, and sustainable economic growth: Empirical evidence from Sub‐Saharan Africa

Shen

Ibrahim

Bello

et al. 2022

African Development Review

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This paper examines the direct and interactive impacts of trade facilitation and institutions on sustainable economic growth (SEG) for 41 Sub-Saharan African economies from 2005 to 2019. The study explores the components of trade facilitation focusing on costs, documents and days (exports and imports) with the aggregated index (TFindex) and institutions, including voice and accountability, government effectiveness, regulatory quality, rule of law, political stability and violence, and control of corruption, used on GDP per capita growth. The empirical evidence relies on the two-step dynamic-system generalized method of moments estimator, accounting for endogeneity, simultaneity, measurement error and reverse causality concerns. The study finds that facilitating trade procedures is a viable option for achieving SEG in the Sub-Saharan Africa region. In addition, institutions driven by government effectiveness, political stability, and regulatory quality are boosters to SEG in the region. Lastly, the interactive impacts of trade facilitation and institutions positively predict the SEG. The study suggests that achieving efficient trading procedures and a sturdy institutional framework will enhance full exploration of the growth potential in SEG. K E Y W O R D Sdynamic-system generalized method of moments, institutions, Sub-Saharan African countries, sustainable economic growth, trade facilitation | INTRODUCTIONThe urgent need to tackle the persistent challenges hampering economic, social and environmental sustainability in the past few decades has witnessed a series of efforts and policy suggestions from governments, policymakers, and national and international organizations. Prominent among these efforts in recent times is the convergence of world leaders from 193 countries across the globe in September 2015, which led to a series of agreements on common and ambitious global goals: "Transforming our World: The 2030 Agenda for Sustainable Development". The Agenda is a well-thoughtout action plan for people, the planet, prosperity, peace and partnership on a set of 17 goals and 169 targets. The motivation behind these goals is the need to build on the achievements recorded in the Millennium Development Goals (MDGs) and further pursue the targets not met. For instance, while the Millennium Development Goal of reducing extreme poverty by 2015 was met, statistics still show that more than 800 million people globally are extremely poor,

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“…At the firm level, Amendolagine et al (2019) found that local sourcing promotes intense GVC participation and upstream sector participation, and the effect is more in countries with good political institutions and better education. Policy and institutions, institutional services, social network, and service trade are also identified as important drivers of GVC participation in Africa (Abdul‐Rahaman & Abdulai, 2020; Anyanwu & Kponnou, 2017; Akrong et al, 2020; Okah Efogo, 2020; Vakataki‘Ofa & Karingi, 2014).…”

Section: Literature Reviewmentioning

confidence: 99%

Africa as headwaiter at the dining table of global value chains: Do institutions matter for her participation?

Alhassan

Zoaka

Ringim

2021

African Development Review

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Global value chains (GVC) have propelled substantial expansion in international trade across the globe over the last two decades. Yet, the institution-GVC nexus in Africa suffers complete neglect in literature. Therefore, we evaluate the impact of different components of political and economic institutions on backward (BWDGVC), forward (FWDGVC), total GVC participation, and GVC position (upstreamness) in Africa. Using system-GMM with United Nations Conference on Trade and Development GVC database (UNCTAD-Eora MRIO) for 47 African countries over the period 2000-2018, the key findings show that the effects of the political and economic institutions on GVC participation are diverse. Specifically, property rights, government spending, monetary freedom, and tax burden negatively affect BWDGVC participation while government integrity, investment freedom, and financial freedom stimulate the BWDGVC. Also, all the components of institutional quality that propel BWDGVC, hinder FWDGVC participation and upstreamness, except investment freedom which promotes both BWDGVC and FWDGVC. Nonetheless, property rights, government integrity, monetary freedom, financial freedom, and tax burden engender total GVC participation, whereas government effectiveness, and investment freedom hinder the total GVC participation. Furthermore, good political institutions promote BWGVC and total GVC but reduce upstreamness. Thus, institutions are fundamental drivers of GVC participation in Africa.

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Does trade in services improve African participation in global value chains?

Cited by 10 publications

References 68 publications

Trade in value-added in developing countries: Does monetary policy matter?

Trade in value-added in developing countries: Does monetary policy matter?

Trade facilitation, institutions, and sustainable economic growth: Empirical evidence from Sub‐Saharan Africa

Africa as headwaiter at the dining table of global value chains: Do institutions matter for her participation?

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