The impact of trade openness on growth: The case of Kenya

Jacob W. Musila and Zelealem Yiheyis

Journal of Policy Modeling, 2015, vol. 37, issue 2, 342-354

Abstract: This paper investigates the effects of trade openness on the level of investment and the rate of economic growth in Kenya using annual time series data. The aggregate trade openness and trade-policy induced openness are evaluated. Controlling for a number of factors, aggregate trade openness is found to have positively affected the level of investment and the rate of economic growth, although the effect on the latter is statistically insignificant. On the other hand, we find trade-policy induced openness to have negatively and significantly affected investment and the rate of economic growth. Granger Causality tests suggest that a change in trade openness influences the long-term rate of economic growth through the interaction with physical capital growth in the case of Kenya.

Keywords: Economic growth; Trade openness; Kenya (search for similar items in EconPapers)
JEL-codes: F1 O4 O5 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (67)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:37:y:2015:i:2:p:342-354

DOI: 10.1016/j.jpolmod.2014.12.001

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