Abstract
The paper investigates the effect of economic integration on agricultural export performance in West African economies using the gravity model of bilateral trade on the annual time series data straddling the period 1970 to 2016. The empirical evidence is based on the pooled OLS and fixed effects estimator. We find that economic integration, as measured by trade openness, is a remarkably strong predictor of export performance in the region. We also examine the effect of geographical distance measured by effective nominal exchange rates and we find it has a negative effect on agricultural export performance. The paper recommends the adoption of a common currency to help mitigate exchange rate negativity that serves as resistance to trade in the region. Likewise, proactive agricultural research, extension and market driven strategies are strongly advocated for driven competition and economic efficiency within the regional agricultural sector.
Highlights
Agriculture remains a huge aspect of any nation’s economy given its impact on the performance of other associated economic variables
The purpose of this study is to: (a) contribute to a better understanding of the evolving context in which economic integration influences agricultural performance by examining more closely the drivers and trends in the sector; (b) analyze the specific countries’ agricultural export peculiarity in West Africa and their ability to cope with regional policy in the face of dynamic macroeconomic uncertainty; (c) review the implication of a custom union with special interest in the static and dynamic benefits from regional integration as it influences the welfare of the partners
The panel econometric method based on the pooled ordinary least squares (OLS) and fixed effect (FE)
Summary
Agriculture remains a huge aspect of any nation’s economy given its impact on the performance of other associated economic variables. This paper examines the effect of economic integration on agricultural export performance in Africa It probes the potential of economic integration to resolve the incidence of underperformance of agricultural export in West Africa and suggests policy strategies to improve the performance of the sector within the West African region. This theme is important for West Africa because economic integration has the potential to reduce the poverty index of the region by enhancing the pool of agricultural resources in order to meet the growing demand of the population in the region.
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