Effect of Trade Facilitation on Economic Complexity in Selected African Countries

Abstract Recent research on international trade suggests that economic development and growth occur as countries gain knowledge and learn to produce and export more sophisticated products. This study examines the effect of trade facilitation on economic complexity in selected African countries over the period 2004–2017. It uses four indicators of trade facilitation capturing physical infrastructure, information, and communication technology (ICT), business, and regulatory environment as well as border, and transport efficiency. The empirical analysis using ordinary least square, and the two‐stage least square estimators shows that effective trade facilitation reform targeted particularly at improving ICT as well as border, and transport efficiency enhances economic complexity. The results remain consistent when an alternative estimation strategy is used. These findings offer scope for a reminder that reforms aimed at simplifying border procedures should be implemented and accelerated in African countries.