Exports and economic growth: relationships and threshold analysis for the Southern Africa customs union

Oscar Chiwira, Lovemore Muchingami and Lawrence Jambani
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Oscar Chiwira: BA ISAGO University, Gaborone, Botswana
Lovemore Muchingami: BA ISAGO University, Gaborone, Botswana
Lawrence Jambani: BA ISAGO University, Gaborone, Botswana

International Journal of Research in Business and Social Science (2147-4478), 2023, vol. 12, issue 8, 274-288

Abstract: This study examines the short-run and long-run relationships between exports and economic growth in the Sothern Africa Customs Union (SACU), as well as the corresponding threshold level. The study used panel data covering the period 1980 to 2021 and employed the Autoregressive Distributed Lag (ARDL) Bounds to test for co-integration relationships, and the Generalized Least Squares (GLS) to determine the respective threshold level. Exports positively support economic growth both in the short-run and in the long-run in SACU. There is long-run bidirectional causality between exports and economic growth. The minimum threshold for exports is 59%. That is, exports only start contributing significantly to economic growth when they are above 59% of the Gross Domestic Product (GDP). SACU should put in place economic policies and regulations that are skewed towards the improvement of the competitiveness of its local products on the global market and also strategically consider export-oriented industrialization strategies. Efforts should also be channeled towards the implementation of bilateral and multilateral trade agreements and harnessing the synergic benefits through the adoption of deliberate value chain mechanisms and initiatives. Key Words:Economic growth; Exports; co-integration; ARDL; SACU

Date: 2023
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