The Impacts of Intra-Trade on Industrialization: Evidence from COMESA
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Keywords

Regional integration, Industrialization, Supply-side, Demand-Side, Endogenous, Heterogeneous panel.

Abstract

This study examines the impact of intra-export on the industrialization in the Common Market for Eastern and Southern Africa (COMESA) over the period 2000 – 2018. The study used a heterogeneous dynamic Autoregressive Distributed-lag (ARDL), namely Pooled Mean Group (PMG) and Mean Group (MG) estimators. The results reveal that intra-export (lnEXT), internet (lnINT), and Human Development Index (lnHDI) have significant positive effects on the industrialization (lnMVA) in the long-run. The financial development Index (FD) exhibits a significant adverse impact on the lnMVA in the long-run, while only the lnINT confirms a significant adverse impact on the lnMVA in the short-run. The results support the established theoretical framework, particularly the endogenous approach, as well as the supply-side and demand-side capacities. These findings may provide some guidance on policies and strategies harmonization to address the supply-side and demand-side capacities, namely, the infrastructure (e.g. INT), human development and to promote industrialization in the region, ceteris paribus.

https://doi.org/10.18488/journal.107.2020.82.75.101
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