IDEAS home Printed from https://ideas.repec.org/p/ukc/ukcedp/1310.html
   My bibliography  Save this paper

The Impact of Trade Liberalisation on Export Growth and Import Growth in Sub-Saharan Africa

Author

Listed:
  • Lanre Kassim

Abstract

This paper adopts panel data methodologies to investigate the impact of trade liberalisation on export growth and import growth across 28 Sub-Saharan African countries from 1981 to 2010. We find that trade liberalisation increases the growth of exports, however, imports grow faster by approximately two percentage points which gives a prima facie evidence that the trade balance in the region deteriorated in the post-liberalisation era. We also find that trade liberalisation significantly raises the price elasticity of demand for exports and imports, however, it does not significantly affect income elasticity of demand.

Suggested Citation

  • Lanre Kassim, 2013. "The Impact of Trade Liberalisation on Export Growth and Import Growth in Sub-Saharan Africa," Studies in Economics 1310, School of Economics, University of Kent.
    • Handle: RePEc:ukc:ukcedp:1310
    as

    Download full text from publisher

    File URL: https://www.kent.ac.uk/economics/repec/1310.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mah, Jai S., 1999. "Import Demand, Liberalization, and Economic Development," Journal of Policy Modeling, Elsevier, vol. 21(4), pages 497-503, July.
    2. Melo, Oscar & Vogt, Michael G., 1984. "Determinants of the demand for imports of Venezuela," Journal of Development Economics, Elsevier, vol. 14(3), pages 351-358, April.
    3. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    4. Anthony P. Thirlwall, 2011. "The Balance of Payments Constraint as an Explanation of International Growth Rate Differences," PSL Quarterly Review, Economia civile, vol. 64(259), pages 429-438.
    5. Nasiruddin Ahmed, 2000. "Export response to trade liberalization in Bangladesh: a cointegration analysis," Applied Economics, Taylor & Francis Journals, vol. 32(8), pages 1077-1084.
    6. Romain Wacziarg & Karen Horn Welch, 2008. "Trade Liberalization and Growth: New Evidence," The World Bank Economic Review, World Bank, vol. 22(2), pages 187-231, June.
    7. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    8. David Greenaway & David Sapsford, 1994. "What does liberalisation do for exports and growth?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(1), pages 152-174, March.
    9. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    10. Edward K. Y. Chen, 1979. "Export Performance and Economic Growth," Palgrave Macmillan Books, in: Hyper-growth in Asian Economies, chapter 6, pages 109-126, Palgrave Macmillan.
    11. A. Colin Cameron & Pravin K. Trivedi, 2010. "Microeconometrics Using Stata, Revised Edition," Stata Press books, StataCorp LP, number musr.
    12. Bertola, Giuseppe & Faini, Riccardo, 1990. "Import demand and non-tariff barriers: The impact of trade liberalization : An application to Morocco," Journal of Development Economics, Elsevier, vol. 34(1-2), pages 269-286, November.
    13. Amelia Santos-Paulino & A. P. Thirlwall, 2004. "The impact of trade liberalisation on exports, imports and the balance of payments of developing countries," Economic Journal, Royal Economic Society, vol. 114(493), pages 50-72, February.
    14. N/A, 2005. "The World Economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 191(1), pages 8-30, January.
    15. Boylan, T. A. & Cuddy, M. P., 1987. "Elasticities of import demand and economic development : The Irish Experience," Journal of Development Economics, Elsevier, vol. 26(2), pages 301-309, August.
    16. Penelope Pacheco-López, 2004. "Does The Impact of Trade Liberalisation on Exports, Imports, the Balance of Payments and Growth: the Case of Mexico," Studies in Economics 0401, School of Economics, University of Kent.
    17. Kornai, Janos, 1992. "The Socialist System: The Political Economy of Communism," OUP Catalogue, Oxford University Press, number 9780198287766.
    18. Michael Bleaney, 1999. "Trade reform, macroeconomic performance and export growth in ten Latin American countries, 1979-95," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 8(1), pages 89-105.
    19. Greenaway, David & Morgan, Wyn & Wright, Peter, 1997. "Trade liberalization and growth in developing countries: Some new evidence," World Development, Elsevier, vol. 25(11), pages 1885-1892, November.
    20. Dean, J.M. & Desai, S. & Riedel, J., 1994. "Trade Policy Reform in Developing Countries since 1985," World Bank - Discussion Papers 267, World Bank.
    21. Greenaway, David & Morgan, Wyn & Wright, Peter, 2002. "Trade liberalisation and growth in developing countries," Journal of Development Economics, Elsevier, vol. 67(1), pages 229-244, February.
    22. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    23. Ratnaike, Yasanji C., 2012. "Is there an empirical link between trade liberalisation and export performance?," Economics Letters, Elsevier, vol. 117(1), pages 375-378.
    24. Lopez, Ramon & Thomas, Vinod, 1988. "Imports and growth in Africa," Policy Research Working Paper Series 20, The World Bank.
    25. Penelope Pacheco-Lopez & A. P. Thirlwall, 2007. "Trade Liberalisation and the Trade-Off Between Growth and the Balance of Payments in Latin America," International Review of Applied Economics, Taylor & Francis Journals, vol. 21(4), pages 469-490.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tan, Yong & An, Liwei & Hu, Cui, 2015. "Regional Effect of Trade Liberalization on the Firm-level Exports," MPRA Paper 81811, University Library of Munich, Germany.
    2. Ofei, Edmund Okraku, 2016. "Trade Liberalization and Export Competitiveness: Evidence from the EU-ECOWAS Trade," MPRA Paper 87808, University Library of Munich, Germany.
    3. Larissa Batrancea & Malar Mozhi Rathnaswamy & Ioan Batrancea, 2021. "A Panel Data Analysis of Economic Growth Determinants in 34 African Countries," JRFM, MDPI, vol. 14(6), pages 1-15, June.
    4. Kenny S, Victoria, 2019. "The Role of Public Sector Enterprise on Economic Development: A Case Study Of The Nigerian Power Sector (1981-2015)," MPRA Paper 93291, University Library of Munich, Germany.
    5. Kenny S, Victoria, 2019. "Determinants of Manufacturing Sector Performance and Its Contribution To Gross Domestic Product In Nigeria," MPRA Paper 93293, University Library of Munich, Germany.
    6. Ibhagui, Oyakhilome, 2017. "How Does Foreign Direct Investment Affect Growth in Sub-Saharan Africa? New Evidence from Non-threshold and Threshold Analysis," MPRA Paper 85784, University Library of Munich, Germany.
    7. Kenny S, Victoria, 2019. "A causal relationship between unemployment and economic growth," MPRA Paper 93133, University Library of Munich, Germany.
    8. Tan, Yong & An, Liwei, 2015. "Regional Effect of Trade Liberalization on the Firm-level Exports," MPRA Paper 66893, University Library of Munich, Germany.
    9. Kenny S, Victoria, 2019. "Effects of Human Capital Investment on Unemployment Volatility in Nigeria (1981-2015)," MPRA Paper 93295, University Library of Munich, Germany.
    10. Kenny S, Victoria, 2019. "Macroeconomic Performance Indicators and Exchange Rate Misalignment in Nigeria," MPRA Paper 93292, University Library of Munich, Germany.
    11. Kenny S, Victoria, 2019. "The role of agricultural sector performance on economic growth in Nigeria," MPRA Paper 93132, University Library of Munich, Germany.
    12. Kenny S, Victoria, 2019. "Exchange Rate Management and Economic Growth: An FMOLS Approach," MPRA Paper 93125, University Library of Munich, Germany.
    13. Kenny S, Victoria, 2019. "Manufacturing Sector Performance, Exchange Rate Volatility and Inclusive Growth In Nigeria (1981-2015)," MPRA Paper 93296, University Library of Munich, Germany.
    14. Constantine, Collin, 2014. "Rethinking the Twin Deficits," MPRA Paper 58798, University Library of Munich, Germany.
    15. Adams, Samuel & Klobodu, Edem Kwame Mensah, 2016. "Remittances, regime durability and economic growth in Sub-Saharan Africa (SSA)," Economic Analysis and Policy, Elsevier, vol. 50(C), pages 1-8.
    16. Kenny S, Victoria, 2019. "Employee productivity and organizational performance: A theoretical perspective," MPRA Paper 93294, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Muhammad Zakaria, 2014. "Effects of Trade Liberalization on Exports, Imports and Trade Balance in Pakistan: A Time Series Analysis," Prague Economic Papers, Prague University of Economics and Business, vol. 2014(1), pages 121-139.
    2. Parikh, Ashok & Stirbu, Corneliu, 2004. "Relationship between Trade Liberalisation, Economic Growth and Trade Balance: An Econometric Investigation," HWWA Discussion Papers 282, Hamburg Institute of International Economics (HWWA).
    3. Mr. Yi Wu & Mr. Li Zeng, 2008. "The Impact of Trade Liberalization on the Trade Balance in Developing Countries," IMF Working Papers 2008/014, International Monetary Fund.
    4. Carlo Pietrobelli & Silvia Nenci, 2007. "Does tariff liberalization promote trade? Latin America in the long run (1900-2000)," Working Papers 0704, CREI Università degli Studi Roma Tre, revised 2007.
    5. Amelia U. Santos‐Paulino, 2005. "Trade Liberalisation and Economic Performance: Theory and Evidence for Developing Countries," The World Economy, Wiley Blackwell, vol. 28(6), pages 783-821, June.
    6. Nenci Silvia & Pietrobelli Carlo, 2008. "Does Tariff Liberalization Promote Trade? Latin American Countries in the Long-Run (1900-2000)," Global Economy Journal, De Gruyter, vol. 8(4), pages 1-30, December.
    7. Tsun Se Cheong & Yanrui Wu, 2013. "Globalization and Regional Inequality," Economics Discussion / Working Papers 13-10, The University of Western Australia, Department of Economics.
    8. Pacheco-López, Penélope & Thirlwall, Anthony, 2009. "Has Trade Liberalisation in Poor Countries Delivered the Promises Ecpected?," Panorama Económico, Escuela Superior de Economía, Instituto Politécnico Nacional, vol. 0(08), pages 7-34, primer se.
    9. Iyke Bernard Njindan, 2017. "Does Trade Openness Matter for Economic Growth in the CEE Countries?," Review of Economic Perspectives, Sciendo, vol. 17(1), pages 3-24, March.
    10. Sèna Kimm Gnangnon, 2019. "Aid for Trade and Recipient Countries’ Export Structure: Does Trade Policy Liberalisation Matter?," Arthaniti: Journal of Economic Theory and Practice, , vol. 18(1), pages 56-85, June.
    11. Parikh, Ashok & Stirbu, Corneliu, 2004. "Relationship Between Trade Liberalisation, Economic Growth and Trade Balance: An Econometric Investigation," Discussion Paper Series 26267, Hamburg Institute of International Economics.
    12. Isis Gaddis & Stephan Klasen, 2014. "Economic development, structural change, and women’s labor force participation:," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(3), pages 639-681, July.
    13. Julien Gourdon, 2011. "Wage inequality in developing countries: South–South trade matters," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 58(4), pages 359-383, December.
    14. Andrés Rodríguez-Pose & Tobias D. Ketterer, 2012. "Do Local Amenities Affect The Appeal Of Regions In Europe For Migrants?," Journal of Regional Science, Wiley Blackwell, vol. 52(4), pages 535-561, October.
    15. Silvia Nenci, 2009. "Tariff liberatization and the growth of word trade: A comparative historiocal analysis to evaluate the multilateral trading system," Departmental Working Papers of Economics - University 'Roma Tre' 0110, Department of Economics - University Roma Tre.
    16. Michel Dumont, 2015. "Working Paper 05-15 - Evaluation of federal tax incentives for private R&D in Belgium: An update," Working Papers 1505, Federal Planning Bureau, Belgium.
    17. Predrag Bjelić & Danijela Jaćimović & Ivan Tašić, 2013. "Effects Of The World Economic Crisis On Exports In The Ceec: Focus On The Western Balkans," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 58(196), pages 71-98, January –.
    18. Agbeyegbe, Terence D. & Stotsky, Janet & WoldeMariam, Asegedech, 2006. "Trade liberalization, exchange rate changes, and tax revenue in Sub-Saharan Africa," Journal of Asian Economics, Elsevier, vol. 17(2), pages 261-284, April.
    19. Dithmer, Jan & Abdulai, Awudu, 2017. "Does trade openness contribute to food security? A dynamic panel analysis," Food Policy, Elsevier, vol. 69(C), pages 218-230.
    20. Gnangnon, Sèna Kimm & Iyer, Harish, 2021. "Effect of Aid for Trade and Foreign Direct Investment Inflows on the Utilization of Unilateral Trade Preferences offered by the QUAD countries," EconStor Preprints 238211, ZBW - Leibniz Information Centre for Economics.

    More about this item

    Keywords

    Trade liberalisation; Export growth; Import growth; Price and Income elasticities of demand; Sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ukc:ukcedp:1310. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr Anirban Mitra (email available below). General contact details of provider: https://www.kent.ac.uk/economics/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.