Do institutions matter for agri-food imports and exports between China and Africa? A gravity model analysis

Nazir Muhammad Abdullahi; Saleh Shahriar; Sokvibol Kea; Adamu Ali Ibrahim; Aminu Muhammad Abdullahi

doi:10.52292/j.estudecon.2025.4316

Authors

Nazir Muhammad Abdullahi Northwest A&F University, China; Kano State Polytechnic, Nigeria https://orcid.org/0000-0003-2149-0638
Saleh Shahriar North South University, Bangladesh https://orcid.org/0000-0001-5199-3258
Sokvibol Kea Kirirom Institute of Technology (KIT), Cambodia https://orcid.org/0000-0003-0950-3336
Adamu Ali Ibrahim Bayero University, Nigeria https://orcid.org/0009-0002-7883-4139
Aminu Muhammad Abdullahi Kano State Polytechnic, Nigeria https://orcid.org/0000-0001-9846-1726

DOI:

https://doi.org/10.52292/j.estudecon.2025.4316

Keywords:

Africa-China, Food market, Gravity model, Institutions

Abstract

This paper aims to study the role of institutional quality on agri-food trade (import and export) between China and 48 African countries during the 2001-2021 period. The gravity model of trade was employed by estimating the Generalised Least Square (GLS) and the Poisson Pseudo-Maximum Likelihood (PPML) estimators, which include zero trade flows for panel data. The main results show that voice and accountability, control of corruption, and the rule of law all enhance agri-food trade flows. While political instability encourages agri-food exports to China. In addition, the economic size of China, the trade cost (distance), and the population of African countries also encourage agri-food trade between China and African economies. Moreover, access to the sea, exchange rate policy, and the economic size of African nations deplete China’s agri-food imports from Africa. We showed the mechanism through which each institutional variable affects China’s agri-food trade flows to African nations.

Downloads

Download data is not yet available.

References

Abendin, S., Duan, P. & Nsiah, C. (2021). International trade and economic growth in Africa: The role of the digital economy. Cogent Economics & Finance, 9(1). https://doi.org/10.1080/23322039.2021.1911767

Abdullahi, N. M., Aluko, O. A. & Huo, X. (2021a). Determinants, efficiency and potential of agri-food exports from Nigeria to the EU: Evidence from the stochastic frontier gravity model. Agricultural Economics (Zemědělská ekonomika), 67(8), 337-349. https://doi.org/10.17221/15/2021-AGRICECON

Abdullahi, N. M., Huo, X., Zhang, Q. & Bolanle, A. A. (2021b). Determinants and potential of agri-food trade using the stochastic frontier gravity model: Empirical evidence from Nigeria. SAGE Open, 11(4), 215824402110657. https://doi.org/10.1177/21582440211065770

Abdullahi, N. M., Shahriar S., Kea S., Abdullahi A. M., Zhang, Q. & Huo X. (2021c). Nigeria’s cocoa exports: A gravity model approach. Ciência Rural, 51(11), e20201043. https://doi.org/10.1590/0103-8478cr20201043

Abdullahi, N. M., Zhang, Q., Shahriar, S., Irshad, M. S., Ado, A. B. & Huo X. (2022). Examining the determinants and efficiency of China’s agricultural exports using a stochastic frontier gravity model. PLoS One, 17(9), e0274187. https://doi.org/10.1371/journal.pone.0274187

Abdullahi, N. M., Zhang Q., Shahriar S., Kea S. & Huo X. (2021d). Relative export competitiveness of the Nigerian cocoa industry. Competitiveness Review: An International Business Journal, 32(6), 1025-1046. https://doi.org/10.1108/cr-03-2021-0036

Abendin, S., Duan, P. & Nsiah C. (2021). International trade and economic growth in Africa: The role of the digital economy. Cogent Economics & Finance, 9(1). https://doi.org/10.1080/23322039.2021.1911767

Abreo, C., Bustillo, R. & Rodriguez, C. (2021). The role of institutional quality in the international trade of a Latin American country: evidence from Colombian export performance. Journal of Economic Structures, 10(24). https://doi.org/10.1186/s40008-021-00253-5

Álvarez, I. C., Barbero, J., Rodríguez-Pose, A. & Zofío, J. L. (2018). Does institutional quality matter for trade? Institutional conditions in a sectoral trade framework. World Development, 103, 72-87. https://doi.org/10.1016/j.worlddev.2017.10.010

Ambetsa, W. O., Kenneth, P. M. & Longinus, K. R. (2019). The determinant of bilateral trade in the East African community: Application of the gravity model. International Journal of Economics and Finance, 11(4). https://doi.org/10.5539/ijef.v11n4p1

Anderson, J. E. (1979). A theoretical foundation for the gravity equation. The American Economic Review, 69(1), 106-116. https://doi.org/https://www.jstor.org/stable/1802501

Anderson, J. E. & Van Wincoop, E. (2003). Gravity with gravitas: A solution to the border puzzel American Economic Review, 93(1), 170-192. https://doi.org/doi:10.125/0002803321455214

Anderson, J. E. & Yotov, Y.V. (2010). The Changing Incidence of Geography. American Economic Review, 100(5), 2157-2186. https://doi.org/10.1257/aer.100.5.2157

Andrew, G. R. (2015). An empirical analysis of Chinese outward foreign direct investment in Africa. Journal of Chinese Economic and Foreign Trade Studies, 8(1), 4-19. https://doi.org/10.1108/JCEFTS-12-2014-0025

Assem, A. H., Romstad, E. & Huo, X. (2010). Determinants of Egyptian agricultural exports: A gravity model approach. Modern Economy, 1(3), 134-143. https://doi.org/10.4236/me.2010.13015

Bakhsh, S., Yin, H., Shabir, M. & Ali, K. (2021). China trade with belt and road countries: the role and impact of institutions. China Economic Journal, 15(1), 29-48. https://doi.org/10.1080/17538963.2021.1994709

Balogh, J. M. & Leitão, N. C. (2019). A gravity approach of agricultural trade: The nexus of the EU and African, Caribbean and Pacific countries. Agricultural Economics - Czech, 65(11), 509-519. https://doi.org/10.17221/131/2019-agricecon

Bandura, W. N. (2021). Trade uncertainty in US and China on trade openness in Sub-Saharan Africa. China Economic Journal, 15(1), 49-59. https://doi.org/10.1080/17538963.2021.2014703

Ben Hassen, T. & El Bilali, H. (2022). Impacts of the Russia-Ukraine War on Global Food Security: Towards More Sustainable and Resilient Food Systems?. Foods, 11(15). https://doi.org/10.3390/foods11152301

Boadu, M. T., Obeng, C. K., Dasmani, I. & Brafu-Insaidoo, W. G. (2021). Assessing Ghana’s bilateral exports potential and gap. African Development Review-Revue Africaine De Developpement, 33(4), 634-647. https://doi.org/10.1111/1467-8268.12610

Bojnec, Š., Fertő, I. & Fogarasi, J. (2014). Quality of institutions and the BRIC countries agro-food exports. China Agricultural Economic Review, 6(3), 379-394. https://doi.org/10.1108/caer-02-2013-0034

Boughanmi, H., Al-Saadi, F., Zaibet, L., Al Abri, I. & Akintola, A. (2021). Trade in intermediates and agro-food value chain integration: The case of the Arab region. SAGE Open, 11(1), 215824402110025. https://doi.org/10.1177/21582440211002513 64.

De Groot, H. L. F., Linders, G-J., Rietveld, P. & Subramanian, U. (2004). The institutional determinants of bilateral trade patterns. Kyklos, 57(1), 103-123. https://doi.org/10.1111/j.0023-5962.2004.00245.x

Dreyer, H. (july, 2014) Misaligned distance: Why distance can have a positive effect on trade in agricultural products. Annual Meeting of Agricultural & Applied Economics Association’s 2014. Minneapolis, Minnesota, EEUU.https://doi.org/10.22004/ag.econ.170455

Ekeocha, D. O., Ogbuabor, J. E. & Orji, A. (2021). Public infrastructural development and economic performance in Africa: A new evidence from panel data analysis. Economic Change and Restructuring, 55(2), 931-950. https://doi.org/10.1007/s10644-021-09334-8

Engemann, H., Jafari, Y. & Heckelei, T. (2022). Institutional quality and the duration of agri-food trade flows. Journal of Agricultural Economics, 74(1),135-154. https://doi.org/10.1111/1477-9552.12491

Fałkowski, J., Curzi, D. & Olper, A. (2018). Contracting institutions, agro-food trade and product quality. Journal of Agricultural Economics, 70(3), 749-770. https://doi.org/10.1111/1477-9552.12314

Faruq, H. A. (2011). How institutions affect export quality. Economic Systems, 35(4), 586-606. https://doi.org/10.1016/j.ecosys.2011.05.001

Federici, D. & Marconi, D. (2010). On exports and economic growth: The case of Italy. The Journal of International Trade & Economic Development, 11(3), 323-340. https://doi.org/10.1080/09638190210151428

Foo, N. Lean, H., & Salim, R. (2020). The impact of China’s one belt one road initiative on international trade in the ASEAN region. The North American Journal of Economics and Finance, 54, 101089. https://doi.org/10.1016/j.najef.2019.101089

Francois, J. & Manchin, M. (2013). Institutions, infrastructure, and trade. World Development, 46, 165-175. https://doi.org/10.1016/j.worlddev.2013.02.009

Gil-Pareja, S., Llorca-Vivero, R. & Paniagua, J. (2019). Trade law and trade flows. The World Economy, 43(3), 681-704. https://doi.org/10.1111/twec.12886

Guan Z., Jim, K. F. & Sheong, I. P. (2020). Determinants of bilateral trade between China and Africa: a gravity model approach. Journal of Economic Studies, 47(5), 1015-1038. https://doi.org/10.1108/jes-12-2018-0461

Gujarati D. N. (2019). Basic econometrics (6th ed.). New York: McGraw Hill. Gul, N., Iqbal, J., Nosheen, M. & Wohar, M. (2023). Untapping the role of trade facilitation indicators, logistics and information technology in export expansion and diversification. The Journal of International Trade & Economic Development, 1-21. https://doi.org/10.1080/09638199.2023.2182606

Hasiner, E. & Yu, X. (2019). When institutions matter: A gravity model for Chinese meat imports. International Journal of Emerging Markets, 14(1), 231-253. https://doi.org/10.1108/IJoEM-11-2016-0290

Hausman, J. A. (1978). Specification test in econometrics, Econometrica, 46(6), 1251- 1271. https://doi.org/0012-9682(197811)46:6<1251:STIE>2.0.CO;2-X

Horsewood, N. & Voicu, A. M. (2012). Does corruption hinder trade for the new EU members? Economics, 6(1). https://doi.org/10.5018/economics-ejournal. ja.2012-47

Igue, N. N. & Ogunleye, T. S. (2014). Impact of real exchange rate on trade balance in Nigeria. African Development Review, 26(2), 347-358. https://doi.org/10.1111/1467-8268.12086

Jagtap, S., Trollman, H., Trollman, F., Garcia-Garcia, G., Parra-Lopez, C., Duong, L., Martindale, W., Munekata, P. E. S., Lorenzo, J. M., Hdaifeh, A., Hassoun, A., Salonitis, K. & Afy-Shararah, M. (2022). The Russia-Ukraine conflict: Its implications for the global food supply chains. Foods, 11(14).https://doi.org/10.3390/foods11142098

Janot, A., Vandanjon, P-O. & Gautier, M. (2016). A revised Durbin-Wu-Hausman test for industrial robot identification. Control Engineering Practice, 48, 52-62. https://doi.org/10.1016/j.conengprac.2015.12.017

Jiang, W. & Liu, G. (2022). The asymmetric impact of exchange rate changes on bilateral trade balance: evidence from China and its trade partners. Economic Research-Ekonomska Istraživanja, 36(2) 1-22. https://doi.org/10.1080/1331677x.2022.2129408

Kalaitzi, A. S. & Chamberlain, T. W. (2020). The validity of the export-led growth hypothesis: some evidence from the GCC. The Journal of International Trade & Economic Development, 30(2), 1-22. https://doi.org/10.1080/09638199.2020.1813191

Kamal, Y. & Zaki, C. (2018). How do technical barriers to trade affect exports? Evidence from Egyptian firm-level data. Journal of Economic Integration, 33(4), 659-721. ttps://doi.org/10.11130/jei.2018.33.4.659

Kea, S., Li H., Shahriar, S., Abdullahi, N. M., Phoak, S. & Touch, T. (2019). Factors influencing Cambodian rice exports: An application of the dynamic panel gravity model. Emerging Markets Finance and Trade, 55(15), 1-22. https://doi.org/10.1080/1540496x.2019.1673724

Khalid, U. (2016). The effect of trade and political institutions on economic institutions. The Journal of International Trade & Economic Development, 26(1), 89-110. https://doi.org/10.1080/09638199.2016.1206142

Kohler, A. & Ferjani, A. (2018). Exchange rate effects: A case study of the export performance of the Swiss agriculture and food sector. The World Economy, 41(2), 494-518. https://doi.org/10.1111/twec.12611

Lee, H., Zobov, A. M., & Degtereva, E. A. (2022). The role of governance and market openness on bilateral trade flows of South Korea with CEE and CIS countries. Russian Journal of Economics, 8(4), 333-351. https://doi.org/10.32609/j.ruje.8.84097 66

Levchenko, A. A. (2007). Institutional quality and international trade. Review of Economic Studies, 74(3), 791–819. https://doi.org/10.1111/j.1467-937X.2007.00435.x

Lin, J., Flachsbarth, I. & Stephan, C. T. (2020). The role of institutional quality on the performance in the export of coconut products. Agricultural Economics, 51(2), 237-258. https://doi.org/10.1111/agec.12552

Mahmood, K. & Munir, S. (2017). Agricultural exports and economic growth in Pakistan: An econometric reassessment. Quality & Quantity, 52(4), 1561-1574. https://doi.org/10.1007/s11135-017-0534-3

Martínez-Zarzoso, I. & Marquez-Ramos, L. (2018). Exports and governance: Is the Middle East and North Africa region different? The World Economy, 42(1), 143-174. https://doi.org/10.1111/twec.12633

Menke, W. (2014). Review of the generalized least squares method. Surveys in Geophysics, 36(1), 1-25. https://doi.org/10.1007/s10712-014-9303-1

Nasrullah, M., Chang, L., Khan, K., Rizwanullah, M., Zulfiqar, F. & Ishfaq, M. (2020). Determinants of forest product group trade by gravity model approach: A case study of China. Forest Policy and Economics, 113, 102117. https://doi.org/10.1016/j.forpol.2020.102117

Ngo, V. D., Janssen, F., Leonidou, L. C. & Christodoulides, P. (2016). Domestic institutional attributes as drivers of export performance in an emerging and transition economy. Journal of Business Research, 69(8), 2911-2922. https://doi.org/10.1016/j.jbusres.2015.12.060

Ngouhouo, I., Nchofoung, T. & Njamen Kengdo, A. (2021). Determinants of trade openness in sub-Saharan Africa: Do institutions matter?. International Economic Journal, 35(1), 96-119. https://doi.org/10.1080/10168737.2020.1858323

Nyamah, E. Y., Attatsi, P. B., Nyamah, E. Y. & Opoku, R. K. (2022). Agri-food value chain transparency and firm performance: the role of institutional quality. Production & Manufacturing Research, 10(1), 62-88. https://doi.org/10.1080/21693277.2022.2062477

Obobisa, E. S., Chen, H., Ayamba, E. C. & Nyarko Mensah, C. (2021). The Causal Relationship Between China-Africa Trade, China OFDI, and Economic Growth of African Countries. SAGE Open, 11(4), 215824402110648. https://doi.org/10.1177/21582440211064899

Oqubay, A. & Lin J. Y. (2019). China–Africa and an Economic Transformation. New York: Oxford University Press.

Oshota, S. O. & Wahab, B. A. (2022). Institutional quality and intra-regional trade flows: Evidence from ECOWAS. Journal of African Trade, 9(1-2), 73-106. https://doi.org/10.1007/s44232-022-00005-9

Paudel, R. C. & Cooray, A. (2018). Export performance of developing countries: Does landlockedness matter? Review of Development Economics, 22(3), e36-e62. https://doi.org/10.1111/rode.12389

Philippidis, G., Resano-Ezcaray, H. & Sanjuán-López, A. I. (2013). Capturing zerotrade values in gravity equations of trade: An analysis of protectionism in agro-food sectors. Agricultural Economics, 44(2), 141-159. https://doi.org/10.1111/agec.12000

Santos Silva, J. M. C. & Tenreyro, S. (2006). The log of gravity. The Review of Economics and Statistics, 88(4), 641-658. https://www.mitpressjournals.org/doi/pdf/10.1162/rest.88.4.641

Santos Silva, J. M. C. & Tenreyro, S. (2011). Further simulation evidence on the performance of the poisson pseudo-maximum likelihood estimator. Economics Letters, 112(2), 220-222. https://doi.org/10.1016/j.econlet.2011.05.008

Shafiullah, M., Selvanathan, S. & Naranpanawa, A. (2017). The role of export composition in export-led growth in Australia and its regions. Economic Analysis and Policy, 53, 62-76. https://doi.org/10.1016/j.eap.2016.11.002

Shahriar, S., Kea, S., Abdullahi, N. M., Rahman, R. & Islam, R. M. (2021). Determinants of Bangladesh’s leather exports to its major trade partners: A panel gravity model approach. Global Business Review, 097215092110362. https://doi.org/10.1177/09721509211036288

Shahriar, S., Lu, Q. & Sokvibol, K. (2019a). Determinants of exports in China’s meat industry: A gravity model analysis. Emerging Markets Finance and Trade, 55(11), 2544-2565. https://doi.org/10.1080/1540496X.2019.1578647

Shahriar, S., Qian, L., Kea, S. & Abdullahi, N. M. (2019b). The gravity model of trade: A theoretical perspective. Review of Innovation and Competitiveness : A Journal of Economic and Social Research, 5(1), 21-42. https://doi.org/10.32728/ric

Siméon, N., Li, X. & Xiao, S. (2022). China’s agricultural assistance efficiency to Africa: Two decades of Forum for China-Africa Cooperation creation. Journal of Agriculture and Food Research, 9. https://doi.org/10.1016/j.jafr.2022.100329

Singh, T. (2010). Does international trade cause economic growth? A survey. The World Economy, 33(11), 1517-1564. https://doi.org/10.1111/j.1467-9701.2010.01243.x

Soeng, R. & Cuyvers, L. (2017). Domestic institutions and export performance: Evidence for Cambodia. The Journal of International Trade & Economic Development, 27(4), 389-408. https://doi.org/10.1080/09638199.2017.1386230

Tinbergen, J. (1962). Shaping the world economy. The International Executive 5(1), 27-30. https://doi.org/10.1002/tie.5060050113

United Nations Conference on Trade and Development -UNCTAD. (2023). Data center of the united nations conference on trade and development database https://unctadstat.unctad.org/wds/ReportFolders/reportFolders.aspx 68

Verwaal, E. & Donkers, B. (2003). Customs-related transaction costs, firm size and international trade intensity. Small Business Economics 21, 257–271. https://doi.org/10.1023/A:1025702520091

Wang, Y. (2020). Yuan’s Valuation under Managed Floating Exchange Rate Regime. The Chinese Economy, 53(6), 455-464. https://doi.org/10.1080/10971475.2020.1792067

Xing, Y. (2012). Processing trade, exchange rates and China’s bilateral trade balances. Journal of Asian Economics, 23(5), 540-547. https://doi.org/10.1016/j.asieco.2012.06.001

Ya, Z. & Pei, K. (2022). Factors Influencing Agricultural Products Trade between China and Africa. Sustainability, 14(9), 2-18, 5589. https://doi.org/10.3390/su14095589

Yanne Sylvaire, D. D., Qing, W. H., Ran, C. H., Kassai, D. L., Vincent, N., Candide Douce, D. A., Frank, O. K., Nicaise, N. P., Traore, F. & Boris, A. F. (2022). The impact of China’s foreign direct investment on Africa’s inclusive development. Social Sciences & Humanities Open, 6(1). https://doi..org/10.1016/j.ssaho.2022.100276

Yotov, Y. V. (2012). A simple solution to the distance puzzle in international trade. Economics Letters, 117(3), 794-798. https://doi.org/10.1016/j.econlet.2012.08.032

Zhang, H., Xie, J. & Zheng, J. (2010) Determinants and potential of China – Africa agricultural trade: An empirical study based on gravity model International. 17 th Annual Conference on Management Science & Engineering, Melbourne, Victoria, Australia. https://doi.org/10.1109/ICMSE.2010.5719888.

Zhang, W., Saghaian, S., & Reed, M. (2023). Investigation of export-driving forces and trade potentials of the U.S. bourbon whisky industry. Applied Economics, 1-21. https://doi.org/10.1080/00036846.2023.2178626