Empirical Analysis of Regional Potential Trade: Case of Ecowas and SADC

Aissata Diallo^1, , Siba Kolin Koivogui² and Hady. B. Bah³

¹School of Economics and Management Beijing Forestry University, Beijing Haidian, P.R China

²Higher Agricultural and Veterinary Institute and Veterinary of Faranah, Republic of Guinea Faranah

³School of tea and food science Anhui Agricultural University PO box 2300036, 130Changjiangxilu, Anhui China

Cite this paper:
Aissata Diallo, Siba Kolin Koivogui and Hady. B. Bah. Empirical Analysis of Regional Potential Trade: Case of Ecowas and SADC. Journal of Finance and Economics. 2018; 6(1):1-13. doi: 10.12691/jfe-6-1-1

Abstract

This paper aims to find export, import and total trade determinants potential of Africa by using panel data method in analysis process from gravity model approach for 35years observations from 1980 to 2015. The previous results on trade potential based in panel data set estimated with the fixed /random model. It is methodology used to evaluate Africa exports potential in a period characterized by strong restrictions on trade, based on the estimates generated by a gravity model for Southern and western African Development Community member countries and their exports to China and the rest of the world. The study purpose is to compare Africa potential trade with partners include China, random effects, fixed effects models are used to estimate data analysis with Hausman test for testing equation and prediction alpha for all variables has been used. Data analysis results show that the potential trade was highly significant at 1 % level (3.80***) between China and ECOWAS countries and significant at 5 % level in SADC countries (3.86**). In terms of partnership, the potential trade was highly significant from EU to ECOWAS/SADC with 5 % level compared to JAPAN and USA. In terms of international trade potential, from Figure 7, the prediction values have been standard from 1980 to 1990, due in fact of factory level in these countries judged very low at that period and stated increasing from 2000 to 2020. It should be conclude that From 2000 to 2018.

Keywords:
regional integration trade potential empirical Africa Ecowas SADC

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