Trade openness, economic growth and economic development nexus in South Africa: a pre- and post-BRICS analysis

Micaela Naledi Monyela and Charles Shaaba Saba ()
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Micaela Naledi Monyela: University of Johannesburg, Auckland Park Kingsway Campus, PO Box 524 Auckland Park
Charles Shaaba Saba: University of Johannesburg, Auckland Park Kingsway Campus, PO Box 524 Auckland Park

Palgrave Communications, 2024, vol. 11, issue 1, 1-18

Abstract: Abstract This research analyses the interplay between trade liberalisation, economic growth, and economic development in South Africa. The research focuses on two distinct periods, pre-BRICS (1991 to 2010) and post-BRICS (2011 to 2021) and aims to assess economic growth and development trajectories which are intertwined with liberalisation. A Vector Error Correction Model (VECM) is used to account for potential cointegration among the variables. The study reports a long-run equilibrium relationship among the variables. The study finds that trade openness substantially influences GDP growth in the post-BRICS period and highlights a unidirectional causal relationship between trade liberalisation and economic growth. The research also reveals a positive association between trade openness and economic development, implying that openness fosters growth and facilitates broader development outcomes in South Africa. The research underscores the importance of trade openness as a driving force for economic growth and economic development in emerging economies like South Africa.

Date: 2024
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DOI: 10.1057/s41599-024-03604-2

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