Trade and Economic Growth in Developing Countries: Evidence from sub-Saharan Africa

DOI

10.2991/iceiss-18.2018.39How to use a DOI?

Keywords

Trade openness; Economic growth; Sub-Saharan Africa

Abstract

This study investigates how trade openness affects economic growth in developing countries, with a focus on sub-Saharan Africa (SSA). We use a dynamic growth model with data from 42 SSA countries covering 1980 to 2012. We take the Pooled Mean Group estimation technique, which is suitable for drawing conclusions from dynamic heterogeneous panels by considering long-run equilibrium relations. The empirical evidence indicates that there is a trade threshold below which greater trade openness has beneficial effects on economic growth and above which the trade effect on growth declines. The evidence also indicates an inverted U-curve (Laffer Curve of Trade) response that is robust to changes in trade openness measures and to alternative model specifications, suggesting the non-fragility of the linkage between economic growth and trade openness in sub-Saharan countries. Our findings are promising and support the view that the relation between trade openness and economic growth is not linear for SSA. Accordingly, SSA countries must have more effective trade openness, particularly by productively controlling import levels, so as to boost their economic growth through international trade.

Copyright

© 2018, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Xuefeng Zhang
AU  - Yongqing Liu
AU  - Zhifeng Wei
AU  - B Lise
PY  - 2018/12
DA  - 2018/12
TI  - Trade and Economic Growth in Developing Countries: Evidence from sub-Saharan Africa
BT  - Proceedings of the 2018 2nd International Conference on Education Innovation and Social Science (ICEISS 2018)
PB  - Atlantis Press
SP  - 154
EP  - 157
SN  - 2352-5398
UR  - https://doi.org/10.2991/iceiss-18.2018.39
DO  - 10.2991/iceiss-18.2018.39
ID  - Zhang2018/12
ER  -