Export diversification in Africa's landlocked countries: governance vs geography

Abstract

The objective of this paper is to analyse the effects of governance and/or geography on export diversification in Africa's landlocked countries (ALDCs). To do so, we used panel data over the period 1996–2021. The Driscoll-Kraay (1998) method is used for the estimations. The results show that for governance, only the political stability variable has a significant effect on export diversification in the presence of the geography variables. However, with regard to the geographical variables, proximity to the large international market and population size have positive and significant effects on export diversification, whereas the remoteness of access to the sea variable and the natural resource rents variable have negative and significant effects on export diversification in the ALDCs in the presence of the governance variables. We can conclude that in the ALDCs, geography prevails over governance in line with the institutions versus geography debate, as it is the geographical variables that best explain export diversification compared to the governance variables.