Africa's comparative advantage in travel service exports

du Toit L. ; Fourie J. (2012)


While trade in African merchandise has lagged behind that of other developing countries, services exports - notably travel and tourism - have shown remarkable growth over the past decade. This paper calculates revealed comparative advantage for 147 countries using a new measure of the Balassa index. The results indicate that 29 of the 50 African countries in the dataset reveal a comparative advantage in travel service exports. The source of this comparative advantage lies in the natural and cultural resources of African countries, and the relative advantages of air versus sea transport - validating an augmented Heckscher-Ohlin hypothesis. If African countries are to benefit from the growth in world service exports, researchers and policymakers should note the (relative) potential for African travel service exports, especially in the smaller, landlocked destinations.

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