Authors: Olayinka Idowu Kareem
Addresses: School of Business and Economics, University of Marburg, Marburg, Germany
Abstract: There has been increasing demand for quality products through the imposition of sanitary and phytosanitary (SPS) measures mostly in developed markets due to change in tastes. However, the preponderance of these measures has effects on trade, particularly for Africa. To this end, this study investigates Africa's cocoa exports effects of the European Union's SPS using the two-step Helpman et al. (2008) model for the period from 1995 to 2012. This study finds that product standards for cocoa are trade enhancing at the extensive margins, while they are not the case at the intensive margins. Thus, this finding suggests that the level of standards compliance for existing exporters is inadequate such that it impacted negatively on their export intensity. The implication of this is that the quality of Africa's cocoa outputs needs to be upgraded through improvement in science and technology as well as educational capacity of the producers.
Keywords: cocoa exports; standards; HMR model; Africa; European Union; EU sanitary measures; phytosanitary measures.
International Journal of Sustainable Economy, 2016 Vol.8 No.1, pp.76 - 92
Received: 21 Mar 2015
Accepted: 25 Aug 2015
Published online: 15 Dec 2015 *