From the Editor

Dear Readers,

Welcome to the fourth issue of The International Trade Journal (ITJ)’s thirty-fifth volume. The articles in this issue focus on trade and investment in sub-Saharan Africa. They study how regional trade agreements affect growth, how foreign direct investment affects growth, the demand for imports of goods and services, and how exporting and importing affect firm performance.

The first article in this issue, by Francis Ejones, Frank W. Agbola, and Amir Mahmood, looks at how joining the East African Community (EAC) affected growth in Burundi, Kenya, Rwanda, Tanzania, and Uganda.¹ The study finds that, on average, growth was faster after these countries joined the EAC. The effects were not uniform, however, with Kenya, Tanzania, and Uganda seeing greater gains than the other countries. In contrast to the EAC, the authors did not find consistent gains from joining either the larger Common Market for Eastern and Southern Africa (COMESA) or the World Trade Organization (WTO).

The second article, by Simplice A. Asongu, Joseph Nnanna, and Paul N. Acha-Anyi, looks at how openness to foreign investment and trade affect growth in sub-Saharan Africa. Using aggregate data from 25 countries in the region, they regress growth on foreign direct investment, exports, and imports. They find that foreign direct investment and trade are both associated with faster growth. However, they also find that exports and imports moderate the gains from foreign direct investment.

The third article, by Clement Agonyim Asaana and Daniel Sakyi, looks at how aggregate expenditures, relative import prices, and foreign exchange reserves affect demand for imports of goods and services in 32 countries in sub-Saharan Africa. Using a system GMM estimator, they find that all of these factors affect demand for imports of goods. In contrast, neither relative import prices nor foreign exchange reserves affect imports of services.

The final article in this issue, by Luke Emeka Okafor, looks at how exporting and importing affect firm performance in Ghana.² The author argues that although exporting might improve productivity, the gains might depend on where the firms export to and whether they use imported inputs. Using data on 259 Ghanaian firms from the 1990s and early 2000s, Okafor finds that firms that export to countries outside of Africa are more productive only when they use imported inputs. When they do not, they are less productive than non-exporters. Moreover, Okafor finds no productivity differences between exporters that only export within Africa and non-exporters whether they use imported inputs or not.

As usual, we would like to thank the people without whom the ITJ would not succeed. We would like to thank the authors who contribute their articles, the anonymous referees who give detailed and timely comments, the team at the International Trade Institute at Texas A&M International University who process submissions quickly and efficiently, our Editorial Board who guide the journal, and our publisher, Taylor and Francis, who ensures the ITJ keeps its high standards.

Notes

¹ Several additional articles in the ITJ have looked at how other regional trade agreements have affected growth and trade. These include studies looking at the Gulf Cooperation Council (Kaitibie and Rakotoarisoa 2017), the North American Free Trade Agreement (Hernandez-Trillo 2018; Nguyen 2016), and the Pacific Island Countries Trade Agreement (Montant 2020).

² Two recent articles in the ITJ have looked at the effect of intermediate inputs on firm performance. Sharma (2014) finds that Indian firms that use imported inputs are more productive than firms that do not. Okafor (2021) finds that imported inputs improve firm performance only for firms with sufficient absorptive capacity.