ABSTRACT This paper studies the effects of ethnic linkages on trade between countries within Africa. I construct a digitised and geo‐referenced dataset of historical ethnic territories for pre‐colonial Africa. The empirical strategy exploits the role of historical ethnic territories in shaping the current distribution of ethnic groups across countries to estimate the impact of potential ethnic networks on modern trade flows with an instrumental variable framework. The impact of ethnic links is quite strong, with trade increasing by nearly two‐thirds between countries that share a common ethnic group. Non‐linearities in the results support the effect being driven by a few ethnic groups creating powerful links between countries despite often being minority groups.
Conrad Copeland (Thu,) studied this question.