Landlockedness and Trade: Evidence from a Quasi-natural Experiment in Ethiopia


Theme

43


Authors

  • Dessie Tarko Ambaw
  • Habtamu Tesfaye Edjigu
  • Nicholas Sim

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Abstract

International trade plays an important role for the economic performance of least developing countries (LDCs). However, geographic barriers to trade such as landlockedness considerably reduce trade for landlocked least developing countries (LLDCs) as these countries typically face very high trade cost. In this paper, we estimate the impact of landlockedness on export and import exploiting the de fecto landlockedness of Ethiopia in 1998 as a natural experiment. Using triple-difference and synthetic control approach, we find that landlockedness has a large negative and statistically significant effect on export as well as import. The results also show that the adverse impact of landlockedness increases over time.

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