The Determinants of Economic Growth in Africa: A Dynamic Causality and Panel Cointegration Analysis

Sharif Hossain () and Rajarshi Mitra ()
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Sharif Hossain: Department of Accounting and Information Systems, Faculty of Business Studies, University of Dhaka, Dhaka 1000, Bangladesh
Rajarshi Mitra: Faculty of Economics 305, Kyushu University, 6-19-1 Hakozaki, Higashi-ku, Fukuoka-shi 812-8581, Japan

Economic Analysis and Policy, 2013, vol. 43, issue 2, 217-226

Abstract: This paper examines the dynamic causal relationships between trade openness, foreign aid, domestic investment, long-term external debt, government spending and economic growth for a panel of 33 highly aid-dependent African countries for the period 1974- 2009. Short-run bidirectional causality is found between economic growth and trade openness. Short-run unidirectional causalities are found from external debt to foreign aid, from trade openness, foreign aid, external debt to domestic investment, from economic growth, trade openness to external debt and also from trade openness to government spending. The long-run effects of trade openness, domestic investment and government spending on economic growth are significantly positive.

Keywords: Unit Root Test; Panel Cointegration; Granger Causality (search for similar items in EconPapers)
JEL-codes: C23 C32 C33 O50 O57 Q40 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:43:y:2013:i:2:p:217-226

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