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Trade Openness and Economic Growth: Panel Data Evidence from Sub-Saharan Africa

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  • Markus Brueckner
  • Daniel Lederman

Abstract

type="main" xml:id="ecca12160-abs-0001"> This paper uses an instrumental variables approach to estimate the relationship between trade openness and economic growth in Sub-Saharan Africa. Instrumental variables estimates show that economic growth has a significant negative contemporaneous effect on trade openness, while trade openness has a significant positive effect on economic growth. A 1 percentage point increase in the ratio of trade over GDP is associated with a short-run increase in growth of approximately 0.5% in a given year; the cumulative long-run effect on the level of GDP per capita is larger, reaching about 2%.

Suggested Citation

  • Markus Brueckner & Daniel Lederman, 2015. "Trade Openness and Economic Growth: Panel Data Evidence from Sub-Saharan Africa," Economica, London School of Economics and Political Science, vol. 82, pages 1302-1323, December.
    • Handle: RePEc:bla:econom:v:82:y:2015:i::p:1302-1323
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    File URL: http://hdl.handle.net/10.1111/ecca.2015.82.issue-s1
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