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Corresponding Author:
Clement Moyo, Department of Economics, Nelson Mandela University, Port Elizabeth, South Africa

Coauthors:
Hlalefang Khobai, Department of Economics, Nelson Mandela University, Port Elizabeth, South Africa

Trade Openness and Economic Growth in SADC Countries

Volume 71 - Issue 4, November 2018
(pp. 417-436)
JEL classification: C01, C13, C33, F10, F14
Keywords: Trade Openness, Economic Growth, ARDL Model, PMG Model, SADC

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.

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Institute for International Economics of the Genoa Chamber of Commerce

Institute for International Economics
of the Genoa Chamber of Commerce