Doing Business in the COMESA Region: The Role of Innovation and Trade Facilitation

Abstract

Developing oil-dependent countries, like Oman, have growing potentials to broaden their export base aside from the hydrocarbon sector, thus enhancing economic growth. The article aims to identify factors to enhance Oman non-oil exports to the COMESA countries with a focus on innovations and trade facilitation. At the macro level, the article uses country trade data to explore the determinants of trade. At the firm level, the focus is on firm export behavior and innovation. Results show the key role of trade facilitation and firm-level innovations in particular at the commodity level. Innovation is significant and positive for commodities like vegetables, plastic, hides, stone, glass, and machinery. Government’s policies to boost exports and enhance economic growth should be geared to reducing market risks facing exporting firms as well as rewarding innovative companies through better innovation-targeted policies.