nep-afr New Economics Papers
on Africa
Issue of 2020‒11‒16
four papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Foreign trade and sustainable business practices - New evidence from Ghana By Ackah, Charles Godfred; Görg, Holger; Hanley, Aoife; Hornok, Cecília
  2. Colonizer Identity and Trade in Africa: Were the British More Favourable to Free Trade? By Federico Tadei
  3. Corruption, Transaction Costs and Innovation in Africa By Laura Nelima Barasa
  4. Information and Advocacy Campaigns in Support of Girls' Education Increase Math Performance and Enrolment By Christopher Cotton; Ardyn Nordstrom; Jordan Nanowski; Eric Richert

  1. By: Ackah, Charles Godfred; Görg, Holger; Hanley, Aoife; Hornok, Cecília
    Abstract: Foreign trade and sustainability is high on the political agenda. German and international policy-makers undertake increasing efforts to use trade policy more effectively for sustainable development purposes. A growing toolbox is meant to facilitate these policy aims, including sustainability chapters in trade agreements, sustainable value chains and sustainability standards. Meanwhile, scientific evidence on how trading activities impact on firms' sustainable behaviour is limited. This question is addressed by researchers from the Kiel Institute for the World Economy and the University of Ghana in a recent study 'Foreign Trade and Sustainable Development in Ghana'. The study provides new empirical evidence on the link between business sustainability and firms' engagement in international trade, using a survey database for more than 400 Ghanaian firms spanning 2013-2015, plus four case studies based on interviews. This unique information source provides a previously untapped wealth of information on various aspects of business sustainability in a Sub-Saharan African country. The key findings of the study are summarized in this policy paper.
    Keywords: Africa,Ghana,foreign trade,sustainability
    Date: 2020
  2. By: Federico Tadei (Universitat de Barcelona)
    Abstract: It has often been claimed that the structure of export trade between Africa and Europe during the colonial period depended on the colonizer identity, with the British relying on free trade and the French employing instead monopsonistic policies. Yet, due to the lack of systematic data on colonial trade, this claim has so far remained untested. In this paper, I use recently available data on export prices from African colonies to estimate monopsonistic profit margins for British and French trading companies. The results challenge the view of the British colonizers as champions of free trade. The level of profit margins was determined much more by the local conditions in Africa than by the identity of the colonial power. The British did not necessarily rely on free trade more than the French and did so only when a stronger control of trade was not a viable option.
    Keywords: Africa, Trade Colonization, Development, Institutions, Market-Power.
    JEL: N17 F1 O43
    Date: 2020
  3. By: Laura Nelima Barasa (University of Nairobi, Kenya)
    Abstract: This paper examines the relationship between corruption and transaction costs, as measured by asset specificity and innovation in Africa. We hypothesize that in the context of developing countries in Africa, corruption is significantly associated with innovation, and that this relationship is mediated by transaction costs, including physical asset specificity and human asset specificity. We test our hypotheses by means of a multiple mediation model. We use the product-of-coefficients approach and bootstrapping techniques to estimate firm-level data from the World Bank Enterprise Survey and Innovation Follow-up Survey for five countries in Sub-Saharan Africa. We find that corruption is positively associated with innovation, and that asset specificity positively mediates this relationship. We conclude that the positive relation between corruption and innovation offers support to the “grease-the-wheels” hypothesis. Furthermore, transaction costs involving physical asset specificity increase the likelihood of innovation in a business environment characterised by corruption, an indicator of poorly functioning institutions. Hence, policies focusing on strengthening institutions are likely to be beneficial for controlling corruption and stimulating innovation Lastly, policies pertaining to tax incentives related to physical asset investments are crucial for enhancing innovation.
    Date: 2020
  4. By: Christopher Cotton (Queen's University); Ardyn Nordstrom; Jordan Nanowski; Eric Richert
    Abstract: We evaluate a large, randomized UKaid Girls' Education Challenge project in rural Zimbabwe, where the staggered rollout of the project allows us to isolate the impact of intervention components specifically intended to improve individual and community-wide knowledge of and support for girls' education. Such advocacy and information campaigns are often included as components of major development projects, but previous work has been unable to isolate their importance and effectiveness separately from the broader projects. We show that advocacy and information campaigns increased mathematics performance and school enrolment. Expanding the program beyond information provision to provide resources and update curriculum corresponded to improvements in literacy, but did not correspond to any additional improvements in mathematics and enrolment beyond what was observed following the information campaign alone.
    Keywords: girls education, information provision, empowerment, economic development, field experiment, advocacy, learning outcomes, enrollment
    JEL: C93 I25 O15
    Date: 2020–11

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