The comparative effects of independence on trade

The empire strikes back: French‐African trade after independence

“…The coefficient on the number of years of independence is negative and significant in columns (2) and (3), indicating that trade flows decrease after independence. This result is consistent with the literature (Head et al., ; Lavallée & Lochard, ). Estimation results also indicate that France exports more to countries that are still French colonies (Algeria until 1962; Comoros until 1975 and Djibouti until 1977).…”

“…Head, Mayer, and Ries () find that trade between a former colony and its colonizer is reduced by 65 percent on average after four decades, but that post‐colonial trade does not exhibit immediate significant changes. In the same vein, Lavallée and Lochard () show that independence reduces trade (imports and exports) with the former colonial power and that this effect is mainly driven by former French colonies. Their results also confirm the gradual deterioration of colonial trade, but indicate that it is slower and less important for imports than for exports of former colonies.…”

“…In keeping with theory, the coefficient estimates for RTA and MRRTA are restricted to have identical but oppositely signed coefficient values . Several recent papers have also used this method to control for MR terms (e.g., Berger et al, ; Lavallée & Lochard, ). In robustness checks, we estimate our model on a world sample and use country‐year fixed effects to account for MR indices.…”

Has China replaced colonial trade?

“…Head et al (2010) show that countries that become independent trade in average less with third countries. Lavallée and Lochard (2015) on the contrary find an increase in former colonies' trade flows to the rest of the world. In the case of China, we fail to find any statistically significant effect of independence with the colonies, in particular when using the theory-consistent gravity equation and hence controlling for unilateral and bilateral unobserved determinants of trade.…”

“…In related papers analyzing the decrease of trade between colonies and their hegemon, Head et al (2010) and Lavallée and Lochard (2015) also estimate the effect of independence between ex-colonies and a wider group of Rest-of the World partners, and find contrasting results. Head et al (2010) show that countries that become independent trade in average less with third countries.…”