Abstract
The objective of this study is to analyze the determinants of export diversification in the 14 countries of the Franc Zone and compare them between WAEMU and CAEMU zones. Export diversification leads to sustainable economic growth, a satisfactory balance of payments, job creation and income redistribution. To this end, the study uses Bruno (2005a, b) LSDVC econometric estimation methods over the period 1990-2015 to identify factors that may or may not improve export diversification in these countries. The main lesson of this study is that more factors favor diversification in WAEMU countries compared to those in the CAEMU zone. In addition, we note a U-inverse relationship between per capita income and diversification in the WAEMU zone while a U-shaped relationship is observed in the second zone. Moreover, the results on the Franc Zone as a whole show that the most relevant explicative factors of export diversification are: human capital, economic development, financial liberalization, degree of trade openness, public investment and the index of democracy.
Highlights
The establishment of a competitive and prosperous economy remains an imperative for States in a global context of economic liberalism characterized by the deregulation of international transactions and the opening of national, regional and international markets
The study looked at the determinants of export diversification by considering the Franc Zone as a single block instead of distinguishing the WAEMU and the CAEMU zones as presented in the comparative analysis
Given that a high level of the Theil index reflects low levels of export diversification, a negative sign in the regression indicates that the factor in question is associated with better diversification. 5.1 Export Diversification and Economic Growth Regarding the determinants of diversification, Table 2 shows a positive and significant relationship between export diversification and economic growth in the WAEMU zone, which corresponds to negative parameters, confirming what the empirical literature predicts
Summary
The establishment of a competitive and prosperous economy remains an imperative for States in a global context of economic liberalism characterized by the deregulation of international transactions and the opening of national, regional and international markets This international competition requires States to have a developed productive system that favors exports. According to the World Bank (1999), over the last thirty years, Africa has lost market share in world trade or in traditional commodities such as cotton, coffee, pineapple, and this despite the trade preferences they have been granted This weakness in economic development, and the development of trade, is reflected in the imbalance between the productive apparatus and exports that are subject to international competition. According to the UNCTAD report (2013), the composition of Africa’s official exports for the period 2010-2012 can be summarized in Table 1 which shows the low level of diversification of inter and extra-African exports
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