The impact of the diaspora on African trade

Patrick Steve KAMDEM SIMO, Institut Sous régional de Statistiques et d'Economie Appliquée
Mathieu Juliot Mpabe Bodjongo, Faculté des Sciences Economiques et de Gestion de l'Université de Dschang

The link between diaspora and trade has been the subject of numerous studies in the literature. However, none of these studies address the specific case of Africa, and migrant’s countries of origin. This paper aims to assess the trade effects generated by the African diaspora. The methodology adopted is that of a gravity model with a five-year jump panel from 1995 to 2020 for 40 African countries with 68 partner countries. The results show that the diaspora has a strong effect on imports and exports, particularly through the information channel and the reduction of transaction costs. This effect is then greater on African imports than on their exports Two other channels have been tested empirically; one for imports and one for exports, and they also have positive and robust effects. These are, respectively, the diffusion of knowledge brought by migrants and the preference for goods from the country of origin.