The effect of the informal economy on bilateral exports from sub-Saharan African countries

The purpose of this study is to analyse the impact of the informal economy on bilateral exports in sub-Saharan African countries. We use a gravity model, to which we add indicators of the informal economy and indicator variables for different economic regions. The study used Pseudo-Poisson Maximum Likelihood (PPML) and Heckman estimation techniques on data from the period 2002–2018. The results show that the informal economy has a negative impact on bilateral inter-community exports and a positive impact on bilateral intra-community exports. These results thus support the idea that the informal economy can accelerate the integration of regional economic communities and ultimately facilitate the establishment of bilateral export free trade areas at the continental level.     

Financial dependence and exports: Entrants or incumbents?

Using firm-level customs data from 51 countries at different levels of development, we explore differential impacts of access to finance on incumbent and new exporters. Consistent with the literature, firms in sectors more dependent on external finance have higher exports based in financially more developed countries. This effect, however, occurs entirely through entrants, with no effect found for incumbents. The trade response of entrants works primarily through the extensive margin (number of exporters) rather than the intensive margin (average size). We further find access to external finance affects exporter entry rates while it does not affect exporter exit rates.