Working Paper BETA #2016-50

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Title : Growth-enhancing effect of openness to trade and migrations: What is the effective transmission channel for Africa?

Author(s) : Dramane Coulibaly, Blaise Gnimassoun, Valérie Mignon

Abstract : This paper investigates the growth-enhancing effect of openness to trade and to migration by focusing on African countries. Relying on robust estimation techniques dealing with both endogeneity and omitted variables issues, our results put forward the importance of accounting for the type of the partner country. We find evidence that while trade between Africa and industrialized countries has a clear and robust positive impact on Africa’s standards of living, trade with developing countries fails to be growth-enhancing. Moreover, our findings show that migration has no significant effect on per capita income in Africa regardless of the partner. Finally, exploring the trade openness transmission channel, we establish that the growth-enhancing effect of Africa’s trade with industrialized countries mainly occurs through an improvement in total factor productivity.

Key-words : Trade, International migration, Income per person, Africa.

JEL Classification : F22, F4, O4, O55.