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Trade Openness and Economic Growth in SADC Countries

Author

Listed:
  • MOYO, Clement Zibusiso

    (Department of Economics, Nelson Mandela University, Port Elizabeth, South Africa)

  • KHOBAI, Hlalefang

    (Department of Economics, Nelson Mandela University, Port Elizabeth, South Africa)

Abstract

In spite of the wave of liberalisation studied during the past decades, the debate still remains open on the issue of the trade openness and economic growth nexus. The paper reviews the relationship between trade openness and economic growth for 11 SADC countries for the period between 1990 and 2016. Investments, labour and inflation are incorporated in the model to form a multivariate framework. The study employed the ARDL-bounds test approach and the Pooled Mean Group (PMG) model to estimate the long-run relationship among the variables. The evidence suggests that co-integration is detected at the 1% level in all countries with the exception of Malawi, Mauritius, Swaziland and Tanzania. Co-integration is only detected at the 10% level in Tanzania while Malawi, Mauritius and Swaziland the null of no co-integration is not rejected. Furthermore, the PMG results revealed that trade openness has a negative impact on economic growth in the long-run. A positive relationship between the variables was found only in the short-run. Apertura commerciale e crescita economica nei paesi SADC Nonostante l’onda liberista che ha caratterizzato gli studi degli ultimi decenni, il dibattito sulla relazione tra apertura commerciale e crescita economica è ancora aperto. Questo articolo rivede detta relazione su un campione di 11 paesi SADC (Southern African Development Cooperation) nel periodo 1990-2016. Investimenti, lavoro e inflazione sono incorporati nel modello. Lo studio impiega i test ARDL-bound (Autoregressive Distributed Lag) e il modello PMG (Pooled Mean Group) per valutare la relazione di lungo periodo tra le variabili. Vi sono evidenze di cointegrazione all’1% in tutti i paesi ad eccezione di Malawi, Muritius, Swaziland e Tanzania. La cointegrazione è significativa solo al 10% in Tanzania mentre per Malawi, Mauritius e Swaziland non si rifiuta il valore zero di non cointegrazione. Inoltre, i risultati PGM rivelano che l’apertura commerciale ha un impatto negativo sulla crescita economica nel lungo periodo. Una relazione positiva tra le due variabili è stata riscontrata solo nel breve periodo.

Suggested Citation

  • MOYO, Clement Zibusiso & KHOBAI, Hlalefang, 2018. "Trade Openness and Economic Growth in SADC Countries," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 71(4), pages 417-436.
    • Handle: RePEc:ris:ecoint:0834
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    References listed on IDEAS

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    Cited by:

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    2. William MESIET, 2023. "The nexus of foreign trade and economic growth in Tanzania. Examining the influence of COVID-19 pandemic. Evidence from vector error correction model," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(3(636), A), pages 273-296, Autumn.
    3. Moyo, Clement & Le Roux, Pierre, 2018. "Interest rate reforms and economic growth: the savings and investment channel," MPRA Paper 85297, University Library of Munich, Germany.
    4. Innocent.U. Duru & Millicent Adanne Eze & Bartholomew.O.N. Okafor & Abubakar Yusuf & Lawrence.O. Ede & Abubakar Sadiq Saleh, 2021. "Military Outlay and Economic Growth: The Scenarios of Lake Chad Basin Countries of the Republic of Chad and Nigeria," Growth, Asian Online Journal Publishing Group, vol. 8(1), pages 12-26.
    5. Adedapo Odebode & Olajide Sunday Oladipo, 2021. "Does Meaningful Relationship Exist Between Trade Liberalization and Economic Growth? A Case Study of a Small Open Economy," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 11(2), pages 1-5.
    6. Innocent .U. Duru & Bartholomew .O.N. Okafor & Friday .O. Adikwu & Franklin .C. Njoku, 2020. "Trade Liberalization and Economic Growth: An Assessment of Nigerian Experience," Asian Development Policy Review, Asian Economic and Social Society, vol. 8(3), pages 194-213, September.
    7. Hlalefang Khobai & Clement Moyo, 2021. "Trade openness and industry performance in SADC countries: is the manufacturing sector different?," International Economics and Economic Policy, Springer, vol. 18(1), pages 105-126, February.
    8. Lawrence MASHIMBYE & Ashenafi Beyene FANTA, 2021. "Trade Openness And Economic Growth In Mozambique," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 21(2), pages 37-52.
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    10. Helder Eduardo Pinto Afonso, 2021. "Trade Liberalisation and Economic Growth, an Emperical Analysis," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 5(3), pages 95-101, March.

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    More about this item

    Keywords

    Trade Openness; Economic Growth; ARDL Model; PMG Model; SADC;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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