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The Effect of Trade Liberalization on Exports, Imports and Balance of Payment: The Case of Sub-Saharan Africa

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  • Odebode, Adedapo
  • Aras, Osman Nuri

Abstract

We explore dynamic non-stationarity panel data estimators namely, mean group (MG) and pooled mean group (PMG) for investigating the extent to which trade policies such as trade liberalisation and tariff rates matter to trade performance using the case of Sub-Saharan Africa (SSA). We found that increasing tariffs has the potential of particularly worsening export growth in SSA but increasing openness via liberalisation policy is likely to spur decline in the import dependence of the SSA economy. Thus, we concluded that while trade liberalisation seems to exhibit no significant impact on export growth in SSA, the same policy may yet be explored to encourage decline in the region’s import activities, particularly those import activities that might threaten the growth of domestic industries.

Suggested Citation

  • Odebode, Adedapo & Aras, Osman Nuri, 2020. "The Effect of Trade Liberalization on Exports, Imports and Balance of Payment: The Case of Sub-Saharan Africa," MPRA Paper 108361, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:108361
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    References listed on IDEAS

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    More about this item

    Keywords

    Trade liberalization; Export growth; Import growth; Balance of Payment; Tariffs rate; Mean group; Pooled mean group; Sub-Saharan Africa.;
    All these keywords.

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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