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Openness, Growth and Convergence in Africa: Evidence from 1980-1999 Data

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  • Mina Baliamoune

Abstract

We explore the effects of openness to trade on growth and the implications for income convergence in Africa. Fixed-effect estimation results indicate that the evidence on the direct impact of openness to trade on growth is mixed and there is no support for conditional convergence. On the other hand, we find that the joint effect of openness and initial income has a U shape, suggesting that greater openness to trade may enhance growth in countries with relatively high income but tends to depress it in lower-income countries. Furthermore, we show that the growth effects of openness to trade also depend on export diversification. Our results suggest that openness to trade has a negative effect on growth in countries with high export concentration. An important policy implication of our findings is that liberalization and reform programs aimed at boosting openness to trade should take into account these interactions, otherwise low-income economies which also tend to have low export diversification could be harmed by trade liberalization.

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  • Mina Baliamoune, 2009. "Openness, Growth and Convergence in Africa: Evidence from 1980-1999 Data," Journal of African Development, African Finance and Economic Association (AFEA), vol. 11(1), pages 109-126.
    • Handle: RePEc:afe:journl:v:11:y:2009:i:1:p:109-126
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    Citations

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    Cited by:

    1. Simplice Asongu & Christelle Meniago & Raufhon Salahodjaev, 2022. "The role of value added across economic sectors in modulating the effects of FDI on TFP and economic growth dynamics," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 18(11), pages 5087-5108, February.
    2. Asongu, Simplice & Odhiambo, Nicholas, 2022. "Foreign Direct Investment, Information Technology and Total Factor Productivity Dynamics in Sub-Saharan Africa," MPRA Paper 119065, University Library of Munich, Germany.
    3. Simplice A. Asongu & Joseph Nnanna & Paul N. Acha-Anyi, 2020. "On the simultaneous openness hypothesis: FDI, trade and TFP dynamics in Sub-Saharan Africa," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-27, December.
    4. Simplice A. Asongu, 2020. "Financial Access and Productivity Dynamics in Sub-Saharan Africa," International Journal of Public Administration, Taylor & Francis Journals, vol. 43(12), pages 1029-1041, September.
    5. John Ssozi & Simplice A. Asongu, 2016. "The Comparative Economics of Catch-up in Output per Worker, Total Factor Productivity and Technological Gain in Sub-Saharan Africa," African Development Review, African Development Bank, vol. 28(2), pages 215-228, June.
    6. Simplice A. Asongu & Paul N. Acha-Anyi, 2020. "Enhancing ICT for productivity in sub-Saharan Africa: Thresholds for complementary policies," African Journal of Science, Technology, Innovation and Development, Taylor & Francis Journals, vol. 12(7), pages 831-845, November.
    7. Mina Baliamoune-Lutz, 2011. "Growth by Destination (Where You Export Matters): Trade with China and Growth in African Countries," African Development Review, African Development Bank, vol. 23(2), pages 202-218.
    8. Baliamoune–Lutz, Mina & McGillivray, Mark, 2015. "The impact of gender inequality in education on income in Africa and the Middle East," Economic Modelling, Elsevier, vol. 47(C), pages 1-11.

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