This paper investigates the effects of connectivity charges
(communication costs) on bilateral exports in Sub Saharan Africa (SSA).
Data from 19 exporter countries was used together with communication
costs data in a gravity model of trade setup. The export data derive
from the IMF Direction of Trade and the COMTRADE databases, while the
communication cost data was collated from a variety of sources including
direct contact with service providers. We find that communication cost
is an important factor in bilateral trade in the region. Communications
have a significant negative effect on export intensity. The study also
reveals that countries with high communication costs generally have
lower export intensity than countries with low communication costs. The
results suggest that investment in ICT infrastructure that brings down
international communication costs will have a positive effect on
regional trade in the long run.
Key Words: Trade, gravity model, communication cost, connectivity, export
JEL Classification: O25, 041, O43, O47, F15, F43