The theoretical link between maritime transport and intra-African trade performance could be gleaned from the new trade theory of international trade (Krugman 1979). According to the new trade theory, international trade among economies can take the form of intra-industry trade such as simple manufactures of agricultural products. However, one thing that is very important as firms engage in trade domestically and internationally is when the cost involved in trade is reduced to the minimum possible (Afesorgbor, 2017; Sakyi and Afesorgbor, 2019). Such that as trade costs reduces, it offers the opportunity for exporting (non-exporting) firms/industries within the domestic economy to enter and increase their existence in the foreign market. The afore implies that reduction in the cost of trade constitutes a major boost to the productivity of firms and international trade performance if effectively facilitated (Melitz, 2003; Sakyi and Afesorgbor, 2019).
Considering the benefits trade could bring, it becomes imperative that the channel through which trade activities occurs is carefully considered to ensure efficient improvement in trade. However, regarding the channel through which trade activities occurs, a major channel that cannot be ignored is maritime transport. This is because maritime transport remains the gateway for international trade globally. Based on the afore, the paper postulate that increasing activities that promotes maritime transport will international and subsequently improvement in trade performance. In addition, improvement in maritime transport will increase the presence of domestic firms to participate effectively in international (i.e., regional, intra, and global) trade and reap the associated benefits of trade.
Interestingly, as regards the measurement of maritime transport, existing studies have employed several measures. These studies have used the liner shipping connectivity index, liner shipping bilateral connectivity index, port throughput, and logistic performance indicators (see: Chang et al., 2020; Fugazza and Hoffman, 2017; Hoffman et al., 2019; Lin et al., 2020; Mlambo, 2021; Sakyi and Immurana, 2021; Saeed et al., 2021; Yu and Luu, 2020).
On the empirical fronts, aside Hoffman, Saeed, and Sodal (2019) quite a number of studies have investigated the effects of maritime transports on trade performance. Matekenya and Nkwadi (2022) employed the autoregressive distributed lag model estimation technique to examine the impact of maritime financing on total trade in South Africa for the period 1994 to 2019. Government expenditure on maritime transport was used as an indicator for maritime financing whiles total was measured using the sum of exports and imports as percentage of GDP. The results revealed that maritime transport financing has a positive significant impact on total trade. In addition, the impact of business freedom on total trade was found to be positive and significant.
Mlambo (2021) investigated the effects of port throughput performance on trade in 10 African countries namely Gambia, Liberia, Nigeria, Kenya, Cameroun, Ivory Coast, Senegal, South Africa, and Morocco spanning the period 2005 to 2018. Port throughput measured using twenty-foot equivalent units was used a proxy for maritime transport performance. Concerning trade, trade as a percentage of GDP was used as an indicator for trade. The results based on the autoregressive distributed lag, pooled mean group, mean group, and system-generalized method of moments estimation strategies revealed that port throughput, and GDP has a significant positive effect on trade. It was also found that the effects of distance on trade was negative and significant.
In a similar study, Sakyi and Immurana (2021) used data on 27 African countries with seaport and the period of study from 2010 to 2017 to examine the effect of liner shipping connectivity index an indicator for maritime transport on trade balance. The researchers used the difference of export and import to proxy trade balance. The system-generalized method of moments estimation technique was employed for the analysis. The results revealed that liner shipping connectivity index has a positive statistically significant effects on trade balance in African countries.
Using the structural equation modelling as the estimation strategy, Saeed, Cullinane, and Sodal (2021) assessed the impact of maritime transport on international trade for the period 2016. They used the top 10 best maritime connected countries and 155 trading partners for their analysis. The liner shipping bilateral connectivity index was used a measure for maritime transport while bilateral exports was used as a proxy for international trade. The outcome from their study showed that liner shipping bilateral connectivity has a positive significant impact on bilateral exports. Furthermore, distance, GDP, and common language was revealed to have a negative significant effects on bilateral exports.
Lin, Kuo and Chang (2020) investigated the impact of liner shipping connectivity on merchandize trade in Asian countries for the period 2016. The researchers measured merchandize trade using the sum of exports and imports. The results obtained based on the ordinary least squares estimation technique revealed that liner shipping connectivity has a positive significant effect on merchandize trade in Asian countries. Further, the results showed that distance (GDP) has a negative (positive) significant impact on merchandize trade.
In Vietnam, Yu and Luu (2020) employed the system-generalized method of moments estimation technique to examine the impact of liner shipping connectivity index on trade flows (i.e., exports and imports volumes of goods and services). The period spanning 2007 to 2018 was employed for the empirical analysis. The results revealed that liner shipping connectivity has a positive significant relationship with exports (imports) volumes. In addition, Yu and Luu (2020) found that GDP effects on exports (imports) volumes is positive and significant. Also, the results obtained indicated that distance has a negative significant effect on exports (imports) volumes.
Chang, Huang, Shang, and Chiang (2020) examined the impact of maritime transport (i.e., liner shipping connectivity index, logistic performance index, and port throughput) on volume of bilateral trade (i.e., exports) in Asian countries for three time periods namely 2007, 2010, and 2015. The study used the Poison Quasi Maximum Likelihood estimation technique for the empirical analysis. The results revealed that all the maritime transport indicators have a positive significant effects on bilateral trade. Further results showed that while the effects of GDP and common language on bilateral trade was positive and significant that of distance was negative and significant.
Lastly, Fugazza and Hoffman (2017) estimated the impact of liner shipping bilateral connectivity on trade for the top 20 country pairs in Asia, Europe, and America for the period 2006 to 2013. The results based on the Poison Pseudo Maximum Likelihood and the Ordinary least squares estimation techniques revealed that liner shipping bilateral connectivity index has positive significant impact on trade. Also, it was found that the effects of regional trade agreement, common language, and GDP (distance) on trade was positive (negative) and statistically significant.
In sum, from the review afore, it can be seen that trade if effectively facilitated by improving maritime transport matter for trade performance. It is also observed that, no empirical study has focused on the effects of maritime transports on intra-African trade performance- the focus of this study. Therefore, this paper fills a major research gap and contribute to the literature by providing an empirical analysis regarding the effect of maritime transports on intra-African trade performance.