Analysis of the Factors Affecting Coffee Export in Cameroon: A Gravity Model Approach

Document Type : Original Research

Authors
Department of Agricultural Economics, Bursa Uludag University
Abstract
This study investigates the factors affecting coffee exports in Cameroon. For this purpose, we employed the gravity model. Considering the sample characteristics, the model is estimated with the Poisson pseudo-maximum likelihood (PPML) method. The main material of the study is a panel data set covering the years 2001-2021 for ten countries, Cameroon’s main coffee export partners. The findings show that the GDP of importing countries, coffee export prices, and bilateral investment treaties (BITs) positively influence exports, whereas distance, exchange rates, and Cameroon’s GDP have negative impacts. The results highlight Cameroon’s logistics infrastructure deficiencies and the significance of stable, high-quality production. The Cameroonian government should implement policies to improve production quality and efficiency by expanding agricultural extension services and offering farmers input and investment incentives to address these challenges. Additionally, improving port efficiency will necessitate the digitalization of operations, implementation of data-driven planning, and strategic infrastructure investments.

Keywords

Subjects


Abafita, J. and Tadesse, T. 2021. Determinants of global coffee trade: Do RTAs matter? Gravity model analysis. Cogent Econ. Financ., 9(1): 1892925.
Abdullahi, N. M., Shahriar, S., Kea, A. M., Abdullahi, Zhang, Q. and Huo, X. 2021. Nigeria’s cocoa exports: A gravity model approach. Cienc. Rural, 51(11): e20201043.
Abdullahi, N. M., Zhang, Q., Shahriar, S., Irshad, M. S., Ado, A. B. and Huo, X. 2022. Examining the determinants and efficiency of China’s agricultural exports using a stochastic frontier gravity model. PLoS ONE, 17(9): e0274187.
AFCA 2024. African Fine Coffee Association (AFCA). About Cameroon. https://afca.coffee/portfolio-item/cameroon/ Accessed 25.01.2024.
Awah, P. C., Nam, H. and Kim, S. 2021. Short term forecast of container throughput: New variables application for the Port of Douala. J. Mar. Sci. Eng., 9(7): 720.
Bikker, J. A. 1987. An international trade flow model with substitution: an extension of the gravity model. Kyklos, 40(3): 315-337.
Borojo, D. G., Yushi, J. and Miao, M. 2022. The impacts of economic policy uncertainty on trade flow. Emerg. Mark. Financ. Trade, 58(8): 2258-2272.
Burger, M., Van Oort, F. and Linders, G. J. 2009. On the specification of the gravity model of trade: zeros, excess zeros and zero-inflated estimation. Spat. Econ. Anal., 4(2): 167-190.
CEPII 2024. The CEPII Gravity database. https://www.cepii.fr/CEPII/en/bdd_modele/bdd_modele_item.asp?id=8 Accessed 28.08.2024
Diarra, G. and Tchapa, T. 2014. Data Collection for Cargo Delays At the Port of Douala. Mission Report, World Bank.
Eichengreen, B. and Irwin, D. A. 1995. Trade blocs, currency blocs and the reorientation of world trade in the 1930s. J. Int. Econ., 38(1-2): 1-24.
Eshetu, F. 2024. Determinants of Ethiopian sesame and coffee exports to its major trade partners: application of the gravity model. Cogent Soc. Sci., 10(1): 2334114.
FAOSTAT 2024. Food and Agriculture Organization of the United Nations. http://www.fao.org/faostat/en/#home. Accessed 28.08.2024.
FXTOP 2024. https://fxtop.com/. Accessed 28.08.2024.
GCP 2016. African Coffee Sector: addressing national investment agendas on a continental scale Cameroon Case Study. Global Coffee Platform (GCP). https://www.globalcoffeeplatform.org/ Accessed 24.01.2024.
Ghazalian, P. L. 2019. Canada's beef exports: Border effects and prospects for market access. Can. J. Agric. Econ., 67(1): 53-74.
Golovko, A. and Sahin, H. 2021. Analysis of international trade integration of Eurasian countries: Gravity model approach. Eurasian Econ. Rev., 11(3): 519-548.
Gómez-Herrera, E. 2013. Comparing alternative methods to estimate gravity models of bilateral trade. Empir. Econ., 44(3): 1087-1111.
Guo, R. 2004. How culture influences foreign trade: evidence from the US and China. J. Socio-Econ., 33(6): 785-812.
Halvorsen, R. and Palmquist, R. 1980. The interpretation of dummy variables in semilogarithmic equations. Am. Econ. Rev., 70(3): 474-475.
Heid, B. and Vozzo, I. 2020. The international trade effects of bilateral investment treaties. Econ. Lett., 196: 109569.
Irshad, M. S., Xin, Q. and Arshad, H. 2018. Competitiveness of Pakistani rice in international market and export potential with global world: A panel gravity approach. Cogent Econ. Financ., 6(1): 1486690.
Jadhav, S. and Ghosh, I. 2023. Future Prospects of the Gravity Model of Trade: A Bibliometric Review (1993–2021). Foreign Trade Rev., 00157325221140154.
Jagdambe, S. and Kannan, E. 2020. Effects of ASEAN-India Free Trade Agreement on agricultural trade: The gravity model approach. World Dev. Perspect., 19: 100212.
Kufa, T. 2010. Environmental sustainability and coffee diversity in Africa. In Proceedings of the ICO world coffee conference (pp. 26-28).
Kircicek, T. and Özparlak, G. 2023. The essential role of international trade on economic growth. J. Econ. Financ. Account., 10(4): 191-202.
Karambakuwa, R. T. and Ncwadi, R. 2020. Trade structure as an enabler of economic growth in Africa. Bus. Manag. Rev., 11(1): 120-130.
Martínez-Zarzoso, I. 2013. The log of gravity revisited. Appl. Econ., 45(3): 311-327.
MINADER 2009. Cameroon Coffe Sector Development Strategy 2010-2015. Ministry of Agriculture and Rural Development of Cameroon (MINADER). Yaoundé, Cameroon.
Nawrot, K. A. 2023. Assessing the effects of trade regionalism in East Asia–evidence from augmented gravity models. Appl. Econ., 55(12): 1285-1297.
NCCB 2022. National Cocoa and Coffee Board. Available online: www.oncc.cm. Accessed 09.12.2022.
Nguyen, D. D. 2022. Determinants of Vietnam's rice and coffee exports: Using stochastic frontier gravity model. J. Asian Bus. Econ. Stud., 29(1): 19-34.
Nsabimana, A. and Tirkaso, W. T. 2020. Examining coffee export performance in Eastern and Southern African countries: Do bilateral trade relations matter? Agrekon, 59(1): 46-64.
Nugroho, A. D. and Lakner, Z. 2022. Effect of globalization on coffee exports in producing countries: A dynamic panel data analysis. J. Asian Financ. Econ. Bus., 9(4): 419-429.
Phung, Q. D. and Nguyen, T. C. 2022. An Analysis of Factors Impacting Vietnam’s Coffee Exports: An Approach from the Gravity Model. J. Asian Financ. Econ. Bus., 9(8): 1-6.
Raballand, G., Refas, S., Beuran, M. and Isik, G. 2012. Why Does Cargo Spend Weeks in Africa: Lessons from Six Countries. World Bank.
René, N., Luc, N. N., Bergaly, K. C. and Daniel, G. 2023. Economic performance of certified cocoa-based agroforestry systems in Cameroon. Environ. Dev. Sustain., 25(5): 3843-3865.
Sadeghi, P., Hosseini, S. S. and Moghaddasi, R. 2019. Analyzing Iran's Export Market Potential Using Gravity Model: Evidence from Date Market. J. Agric. Sci. Technol., 21(4): 773-783.
Sahoo, P. and Dash, R. K. 2022. Does FDI have differential impacts on exports? Evidence from developing countries. Int. Econ., 172: 227-237.
Sanjuán‐López, A. I. and Dawson, P. J. 2010. Agricultural exports and economic growth in developing countries: A panel cointegration approach. J. Agric. Econ., 61(3): 565-583.
Santos Silva, J. M. C. and Tenreyro, S. 2006. The log of gravity. Rev. Econ. Stat., 88(4): 641-658.
Santos Silva, J. M. C. and Tenreyro, S. 2011. Further simulation evidence on the performance of the Poisson pseudo-maximum likelihood estimator. Econ. Lett., 112(2): 220-222.
Santos Silva, J. M. C. and Tenreyro, S. 2022. The log of gravity at 15. Port. Econ. J., 21(3): 423-437.
Samantha, N. P. G. and Haiyun, L. 2018. Does Inward Foreign Direct Investment Promote Export? Empirical Evidence from Sri Lanka. Bus. Econ. Res., 8(3): 1-18.
Senbet, L. W. and Simbanegavi, W. 2017. Agriculture and structural transformation in Africa: An overview. J. Afr. Econ., 26(suppl_1): 3-10.
Sharma, P., Rohatgi, S. and Jasuja, D. 2023. Scientific mapping of gravity model of international trade literature: A bibliometric analysis. J. Scientometr. Res., 11(3): 447-57.
Shillie, P. N. and Egwu, M. J. B. 2020. Value Added Agriculture: An Analysis of Economic Relations in the Coffee Value Chain in the North West Region of Cameroon. Ulus. Ekon. İşlet. Polit. Derg., 4(2): 281-296.
Tinbergen, J. 1962. Shaping the world economy. Suggestions for an international economic policy. New York: Twentieth Century Fund.
TRADEMAP 2024. https://www.trademap.org. Accessed 28.08.2024
Van Bergeijk, P. A. and Brakman, S. 2010. The comeback of the gravity model, the gravity model in international trade: Advances and applications. Cambridge University Press.
VOA 2019. Cameroon Aims to Drink, Produce More Coffee. VOANEWS AFRICA. https://www.voanews.com/a/cameroon-aims-to-drink-produce-more-coffee/4881136.html
World Bank 2016. Cameroon Country Economic Memorandum Markets, Government, and Growth. Report No: 110907-CM.
World Bank 2022. The Container Port Performance Index 2021: A Comparable Assessment of Container Port Performance. World Bank, Washington, DC. License: Creative Commons Attribution CC BY 3.0 IGO.
World Bank 2024. World Development Indicators. https://databank.worldbank.org/source/world-development-indicators. Accessed 28.08.2024.
Xiong, T. 2022. The effect of bilateral investment treaties (BITs) on the extensive and intensive margins of exports. Q. Rev. Econ. Financ., 84: 68-79.
Yadav, A. K. and Chattopadhyay, U. 2024. Determinants of India's cotton export performance: An empirical analysis. Int. Econ., 179: 100521.
Yusiana, E., Hakim, D. B., Syaukat, Y., & Novianti, T. (2022). Analysis of factors influencing Thai rice trade based on Gravity model. IOP Conf. Ser.: Earth Environ. Sci., 951: 012039

Articles in Press, Accepted Manuscript
Available Online from 01 January 2024