Trade Openness and Economic Growth in SADC Countries

Clement Moyo and Hlalefang Khobai

Economia Internazionale / International Economics, 2018, vol. 71, issue 4, 417-436

Abstract: In spite of the wave of liberalisation studied during the past decades, the debate still remains open on the issue of the trade openness and economic growth nexus. The paper reviews the relationship between trade openness and economic growth for 11 SADC countries for the period between 1990 and 2016. Investments, labour and inflation are incorporated in the model to form a multivariate framework. The study employed the ARDL-bounds test approach and the Pooled Mean Group (PMG) model to estimate the long-run relationship among the variables. The evidence suggests that co-integration is detected at the 1% level in all countries with the exception of Malawi, Mauritius, Swaziland and Tanzania. Co-integration is only detected at the 10% level in Tanzania while Malawi, Mauritius and Swaziland the null of no co-integration is not rejected. Furthermore, the PMG results revealed that trade openness has a negative impact on economic growth in the long-run. A positive relationship between the variables was found only in the short-run. Apertura commerciale e crescita economica nei paesi SADC Nonostante l’onda liberista che ha caratterizzato gli studi degli ultimi decenni, il dibattito sulla relazione tra apertura commerciale e crescita economica è ancora aperto. Questo articolo rivede detta relazione su un campione di 11 paesi SADC (Southern African Development Cooperation) nel periodo 1990-2016. Investimenti, lavoro e inflazione sono incorporati nel modello. Lo studio impiega i test ARDL-bound (Autoregressive Distributed Lag) e il modello PMG (Pooled Mean Group) per valutare la relazione di lungo periodo tra le variabili. Vi sono evidenze di cointegrazione all’1% in tutti i paesi ad eccezione di Malawi, Muritius, Swaziland e Tanzania. La cointegrazione è significativa solo al 10% in Tanzania mentre per Malawi, Mauritius e Swaziland non si rifiuta il valore zero di non cointegrazione. Inoltre, i risultati PGM rivelano che l’apertura commerciale ha un impatto negativo sulla crescita economica nel lungo periodo. Una relazione positiva tra le due variabili è stata riscontrata solo nel breve periodo.

Keywords: Trade Openness; Economic Growth; ARDL Model; PMG Model; SADC (search for similar items in EconPapers)
JEL-codes: C01 C13 C33 F10 F14 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Related works:
Working Paper: Trade openess and economic growth in SADC countries (2018)
Working Paper: Trade openness and economic growth in SADC countries (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ecoint:0834

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