To generate sufficient foreign exchange earnings for economic transformation, Ghana needs to expand its export base. This study analysed Ghana's bilateral export potential and gap using the stochastic frontier gravity model for a panel of 61 key trading countries over the period 2000-2018. The results show a mean untapped export potential of US$1.1 billion and a mean gap of US$1 billion for Ghana. The tax burden of trading partners, poor infrastructure and low credit to the private sector limit the exploitation of Ghana's bilateral export potential. On the basis of these findings, it is recommended that the government and policy-makers of Ghana should increase investment in trade-related infrastructure, provide reliable and affordable electricity supply, deal decisively with corruption and negotiate for the elimination of all forms of barriers to increase export flows.export efficiency, export gap, export inefficiency, potential export, Stochastic frontier gravity model | INTRODUCTIONExports have become one of the channels through which most countries have integrated into the international market. Besides providing direct employment, incomes and foreign exchange to the exporting countries, exports allow countries to ameliorate the impact of the developmental challenge of the smallness of domestic markets on productivity by exposing these countries to the global market with huge economies of scale, increased capacity utilization, transfer of technology, managerial skills, productivity gains and greater product variety. The downsides of openness, however, are that countries become vulnerable to external shocks and suffer terms of trade shocks with adverse implications for macroeconomic targets and economic growth (Cavalcanti et al., 2015; United Nations Conference on Trade and Development, 2012).Theoretically, three factors limit export flows between countries: (a) natural constraints, such as geographical distance and transportation costs; (b) 'behind-the-border' constraints, such as institutional and infrastructural rigidities in exporting countries; and (c) 'beyond-the-border' constraints, such as institutional and infrastructural rigidities in importing countries. Beyond-the-border limitations can be separated into two categories: explicit beyond-the-border constraints and implicit beyond-the-border constraints. Tariffs and the exchange rate are the most obvious beyond-the-border limitations. Conversely, it is difficult to detect and quantify implicit beyond-the-border limitations arising from importing countries' institutional and policy rigidities; they are often taken for granted and are not country specific. In the absence of these constraints, exporting countries will reap their export potential (Bhattacharya & Das, 2014; Obeng, forthcoming;Khan & Kalirajan, 2011).
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