Abstract:
This paper seeks to explain the evolution of specialization in Sub-Saharan and North Africa from 1980 to 2014 using a methodological approach that relies on propositions of the neoclassical trade theory. Next to the impact of traditional factors such as technological differences and factor endowments, we examine their effects in an African context. We use duality theory combined with a flexible functional form to specify an empirical model of specialization consistent with neoclassical explanation. According to the empirical model, a sector’s share in GDP depends on both relative factor supplies and relative technology differences, and the estimated parameters of the model have a close and clear connection to theoretical parameters. We consider technological differences in the neutral Hicks sense and use OLS technique to estimate Rybcynski’s elasticities. Our results show that (i) SSNA countries have strengthened their specializations in agriculture, mining, transport and communication and the service sector, particularly from 1990 onwards; (ii) the differ ent levels of disaggregation may play contrasting roles and (iii) a neglect of the manufacturing sector due to the fact that it has not been favored by factor endowments, mainly public capital.