Turkey - Africa trade: A gravity model estimation of determinants

Abstract

This study investigates the key determinants of trade between Africa and Turkey by using the gravity model of international trade. The major objective is to identify the core socio-cultural and macroeconomic factors of bilateral trade between both sides. Poisson – Pseudo-Maximum Likelihood Estimator is used in order to efficiently test the impact of many dummy variables and fixed effects. The results illustrate that there are geographic, socio-cultural and macroeconomic factors in the African economies and Turkey’s side. African countries near to Turkey, sharing similar religion and recorded higher economic growth rates in the last couple of decades have better bilateral trade with Turkey than the others. Besides, economic freedom improvements in these countries have positive relationship with their bilateral trade. On the other hand, improvement in corruption level of Turkey, increasing its ODA donation and opening commercial consulates in African countries are the positive factors of its bilateral trade with Africa. However, there is no statistical evidence to say Turkey’s trade with Africa is for the purpose of natural resources.