Volume 19 #1 – Spring 2017

JAD is in transition and has suspended accepting papers.

Table of Contents

  • How Facilitating Trade would Benefit Trade in Sub-Saharan Africa
    Abdoulaye Seck

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    Despite a significant trade expansion that has been above the world average in the recent period, Sub-Saharan Africa still remains relatively marginalized in the world trading system. This paper sets out to analyze the extent to which various elements of the trade cost landscape in the sub-continent may have contributed to shape trade patterns both within the region and with the outside world. Various trade facilitation measures such as border efficiency, physical infrastructure, regulatory environment, information and communication technology, and the World Bank's Logistics Performance Index are related to bilateral trade flows in a gravity framework. The study finds, based on the Poisson pseudo-maximum likelihood estimation, that raising the sub-continent to the level of the world average would generate significant export gains that amount to reducing bilateral distance by between 1.7 to 10.1 percent, or reducing ad valorem tariff by between 1.4 and 10.2 percentage-points. The extent of the gains varies greatly across the trade facilitation measures, commodity sectors, export destinations, as well as which trading partner undertakes the corresponding reforms. These results offer a strong basis for designing targeted trade facilitation reforms that would improve Africa's international trade position in the wake of the recent success of WTO's trade negotiations.

    Keywords: Trade facilitation, Trade flows, Sub-Saharan Africa, Gravity model

    JEL Classification: F13, F14

  • Child Disability and Mothers’ Labor Market Participation in Cameroon
    Arlette Simo Fotso

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    This study seeks to evaluate the effect of a child's disability on the mothers' labour market participation using Cameroon 2011 Demographic and Health Survey- National Multiple Indicators Cluster Survey (EDS-MICS), capturing heterogeneity according to mother’s level of education. In order to allow for endogeneity bias and the fact that a disability may impose various types of constraints on a family, two disability indicators were constructed. These distinguish between children with a healthcare-cost-intensive disability and those with a time-intensive one. The results obtained show that having a child whose disability requires high healthcare expenditures increases the probability that a non-graduated mother will be employed by 12%, and that she will work full-year by 3% and seasonally by 6%. Where the child’s disability imposes time constraints, the probability of working all the year for the non-graduated mother is reduced by 14%. No significant effect is found for graduated mothers. It is important, therefore, that policymakers take account of the variety of costs imposed by a child’s disability and heterogeneous effects according to mother's level of education.

    Keywords: Disability, Children, Cost of illness, Household production model, Education, Labor market

    JEL Classifications: I1, J1, J2

  • Management Standard Certification and Firm productivity: Micro-evidence from Africa
    Micheline Goedhuys, Pierre Mohnen

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    Using micro evidence from manufacturing and services firms located in 41 African countries, this paper shows that better management practice, reflected by international management certification, helps firms to raise productivity. Larger and older firms and firms operating closer to the technological frontier are more likely to possess international management standards certification, as do firms engaged in international transactions. Certification in turn raises productivity levels further, in line with a process of continuous improvement. The findings hold for both manufacturing and services firms.

    Keywords: Standards, Productivity, Africa, Manufacturing, Services

    JEL Classifications: D02, D24, L15, O33, O55

  • Innovation and Volatility of the GDP Growth Rate: Case of the Economies of Sub-Saharan Africa
    Yaya KY, Francois Joseph Cabral

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    The objective of this research is to assess the impact of innovation on the volatility of GDP growth rate in the economies of Sub-Saharan African (SSA) countries. Using a dynamic panel model, a volatility index that we built and an innovation index produced by United Nations Industrial Development Organization (UNIDO) , we show that innovation reduces the volatility of growth rates of GDP. In other words, the likelihood to control the volatility of GDP growth rate is an increasing function of innovation. There is a threshold effect of innovation effect on volatility depending to GDP per capita. Indeed, innovation reduces volatility but until a certain level of GDP per capita. This threshold is estimated at US $ 671 with a confidence level of 90% equal to US $ 600 - US $ 740. The effect of innovation on volatility is more efficient in a politically stable environment. Local innovation and innovation imported (foreign direct investment) have different behavior. The first reduces volatility while the second increases volatility.

    Keywords: Innovation, GDP growth rate, Volatility, Sub-Saharan African (SSA) countries

    JEL Classifications: O3, O4, O55

  • Do Firms Learn by Exporting or Learn to Export? Evidence from Senegalese Manufacturing Firms
    Fatou Cisse

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    This paper examines the causal relationship between exporting and productivity in the manufacturing firms in Senegal using a unique firm-level panel data for the period 1998-2011. We control for endogeneity and sample selection by jointly estimating the productivity and the export-participation equations. Our results indicate strong evidence of both self-selection of the most efficient firms enter into the export market and effect of Learning in the export market. Findings show that firms with better financial health are likely to exports. Furthermore, the ownership of intangible assets like brevet and the quality of labour positively affect the probability to export of the manufacturing firms. We investigate the sectoral heterogeneity of the Learning-by exporting effect (LBE) and find evidence of a weak heterogeneity of the learning-by-exporting effect between the sectors. From a policy relevance, the evidence of learning-by-exporting suggests Senegal has much to gain from encouraging exports by helping domestic firms to overcome the barriers to enter into foreign markets by promoting access to intangible assets like brevet Particularly, export promotion policies could be helpful, reducing the level of financial constraints faced by firms, and indirectly enhancing their investment spending and productivity. As a driver of manufacturing exports, labour quality must be carefully considered in the perspectives of industrial development. Considerable efforts are required in the Senegalese educational system in order to match the training to the requirements of the labour market.

    Keywords: Exporting, Total Factor Productivity, Learning by exporting, Self-selection

    JEL Classifications: F14, D24, C33

  • Does School Quality Matter? Primary Schools Characteristics and Child Labor Intensity in Senegal
    Ehouman Williams V. Ahouakan and M’Baye Diene

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    This study analyzes the relationship between school quality and child labor in Senegal. Unlike previous studies that consider child labor as primarily due to household poverty, economic shocks or market imperfections, it tries to assess whether the perceptions that households have about the capacity of investments in education to provide their children with a significant gain can motivate their interest or their disinterest to send them to school and / or to involve them immediately into work. From a simple theoretical model we develop, we show how school quality may influence the choices that households make for their children concerning schooling or labor. We then assessed empirically that relationship using the Senegal’s 2010-2011 DHS-MICS and the Statistical Yearbook of the Ministry of Education. The Heckman's two-step model combined with the two-step approach proposed in Card and Krueger (1992) have been employed to deal with the problems suggested by the theoretical model. Our empirical findings confirm the theoretical model’s results. They indicate that the labor options that households make for their children in Senegal depend on the schools' characteristics in this country. More precisely, we find that an increase of the pupils-teacher ratio and of the grade repetition rate, seems be considered by households as a signal of bad quality of school and lead respectively to an increase of the burden of works performed by children into economic and domestic activities.

    Keywords: School Quality, Child labor, Poverty, Markets Imperfection, Senegal

    JEL Classification: O12, O15, J08, J13, I25

  • Transforming Rural Africa-Economics, Technology and Governance
    Keynote address at the African Development Bank/African Finance Economic Association Luncheon
    January 4, 2016, San Francisco
    Professor Yaw Nyarko, New York University