IDEAS home Printed from https://ideas.repec.org/a/hur/ijarbs/v4y2014i5p514-532.html
   My bibliography  Save this article

The Impact of Trade Liberalization on Economic Growth in Tanzania

Author

Listed:
  • Mayasa Mkubwa Hamad
  • Burhan Ahmad Mtengwa
  • Stabua Abdul Babiker

Abstract

The broad objective of this study is to analyze the effect of trade liberalization on economic growth in Tanzania. The impact of trade liberalization on economic growth has raised a great attention to many researchers in the international trade arena. Various studies have been conducted however the literature still has the mixed bag of results. Thus, the researchers were motivated to pursue this study so as to fill the gap in the International Trade in Tanzania. The study adopted a simple linear regression model where real GDP was the dependent variable while trade openness was the independent variable. Annual time series data was used covering the period 1970-2010. This overall period was then subdivided into a closed economy period (1970-1985) and a open economy period (1986-2010). OLS technique was used to estimate the regression model twice, regarding the two sub-periods. The empirical findings indicated that trade openness had a positive and significant effect on economic growth in Tanzania. However, this effect was relatively greater during the closed economy compared to the open economy period. It has been indicated that since late 1980s Tanzania experienced continuous trade deficits in her accounts. This has been the contributing factor in the obtained results. Thus, the study recommended that there is a need for the country to put strong initiative on adding value on her exports so as to compensate for imports. There is a need of developing more domestic industries and attracting more investors in the economy. Also the elimination of unnecessary tariffs is required.

Suggested Citation

  • Mayasa Mkubwa Hamad & Burhan Ahmad Mtengwa & Stabua Abdul Babiker, 2014. "The Impact of Trade Liberalization on Economic Growth in Tanzania," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(5), pages 514-532, May.
    • Handle: RePEc:hur:ijarbs:v:4:y:2014:i:5:p:514-532
    as

    Download full text from publisher

    File URL: http://hrmars.com/hrmars_papers/The_Impact_of_Trade_Liberalization_on_Economic_Growth_in_Tanzania.pdf
    Download Restriction: no
    File URL: http://hrmars.com/hrmars_papers/The_Impact_of_Trade_Liberalization_on_Economic_Growth_in_Tanzania.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Evguenia Bessonova & Konstantin Kozlov & Ksenia Yudaeva, 2003. "Trade Liberalization, Foreign Direct Investment, and Productivity of Russian Firms," Working Papers w0039, New Economic School (NES).
    2. Romain Wacziarg & Karen Horn Welch, 2008. "Trade Liberalization and Growth: New Evidence," The World Bank Economic Review, World Bank, vol. 22(2), pages 187-231, June.
    3. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
    4. Salinas, Gonzalo & Aksoy, Ataman, 2006. "Growth before and after trade liberalization," Policy Research Working Paper Series 4062, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. gebregergis, Cherkos Meaza, 2017. "An Assessment of the Economic Impact of Globalization In Ethiopia: A Co-Integration Analysis," MPRA Paper 83533, University Library of Munich, Germany.
    2. William MESIET, 2023. "The nexus of foreign trade and economic growth in Tanzania. Examining the influence of COVID-19 pandemic. Evidence from vector error correction model," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(636), A), pages 273-296, Autumn.
    3. Sayef Bakari, 2017. "The Relationship between Export, Import, Domestic Investment and Economic Growth in Egypt: Empirical Analysis," EuroEconomica, Danubius University of Galati, issue 2(36), pages 34-43, November.
    4. Okoro, Agwu Sunday Phd & Yusuf Fadima & Momohsanni Adamu & Maria Abdulmajeed Bello Kumo & Joshua Adams Ndako, 2023. "Analysis of the Potential Impact of the African Continental Free Trade Agreement (AfCFTA) on the Nigeria Economy," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(9), pages 1498-1509, September.
    5. Bakari, Sayef, 2016. "Impact of Exports and Imports on Economic Growth in Canada: Empirical Analysis Based on Causality," MPRA Paper 75910, University Library of Munich, Germany.
    6. Kazi Mohammed Kamal Uddin & Munem Ahmad Chowdhury, 2021. "Attaining Sustainable Economic Growth in Bangladesh: Role of External Financial Means of Implementation," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 9(1), pages 1-14, March.
    7. Mwinlaaru, Peter Yeltulme & Ofori, Isaac Kwesi, 2017. "Real exchange rate and economic growth in Ghana," MPRA Paper 82405, University Library of Munich, Germany.
    8. Samuel Antwi & Prince Yeboah Boateng & Awudu Salley, 2021. "?he effect of foreign direct investment on economic growth in Ghana: the role of exchange rate volatility," Bulletin of Applied Economics, Risk Market Journals, vol. 8(1), pages 81-96.
    9. Bekele, Yetsedaw Emagne, 2017. "Exploring the Relationship between Trade Liberalization and Ethiopian Economic Growth," MPRA Paper 83584, University Library of Munich, Germany.
    10. Adedapo Odebode & Olajide Sunday Oladipo, 2021. "Does Meaningful Relationship Exist Between Trade Liberalization and Economic Growth? A Case Study of a Small Open Economy," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 11(2), pages 1-5.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hakimi, Abdelaziz & Hamdi, Helmi, 2016. "Trade liberalization, FDI inflows, environmental quality and economic growth: A comparative analysis between Tunisia and Morocco," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 1445-1456.
    2. Falvey, Rod & Foster, Neil & Greenaway, David, 2012. "Trade Liberalization, Economic Crises, and Growth," World Development, Elsevier, vol. 40(11), pages 2177-2193.
    3. Douglas A. Irwin, 2019. "Does Trade Reform Promote Economic Growth? A Review of Recent Evidence," Working Paper Series WP19-9, Peterson Institute for International Economics.
    4. Rod Falvey & Neil Foster-McGregor & Ahmed Khalid, 2013. "Trade liberalisation and growth: a threshold exploration," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 18(2), pages 230-252.
    5. Pema Khandu, 2014. "Impact of trade liberalization on economic growth in small developing economies: Bhutan as a case study," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 4(5), pages 263-278, May.
    6. Brendan Skip Mark & Huei-Jyun Ye & Andrew Foote & Tiffani Crippin, 2021. "It’s a Hard-Knock Life: Child Labor Practices and Compliance with IMF Agreements," Social Sciences, MDPI, vol. 10(5), pages 1-21, May.
    7. Ulaşan, Bülent, 2012. "Openness to international trade and economic growth: A cross-country empirical investigation," Economics Discussion Papers 2012-25, Kiel Institute for the World Economy (IfW Kiel).
    8. Sundar Ponnusamy, 2022. "Export specialization, trade liberalization and economic growth: a synthetic control analysis," Empirical Economics, Springer, vol. 63(2), pages 637-669, August.
    9. Nauro F. Campos & Paul De Grauwe & Yuemei Ji, 2017. "Structural Reforms, Growth and Inequality: An Overview of Theory, Measurement and Evidence," CESifo Working Paper Series 6812, CESifo.
    10. Shafaeddin, Mehdi, 2010. "Trade liberalization, industrialization and development; experience of recent decades," MPRA Paper 26355, University Library of Munich, Germany.
    11. Kym Anderson, 2005. "On the Virtues of Multilateral Trade Negotiations," The Economic Record, The Economic Society of Australia, vol. 81(255), pages 414-438, December.
    12. Paul S. Segerstrom & Ignat Stepanok, 2018. "Learning How To Export," Scandinavian Journal of Economics, Wiley Blackwell, vol. 120(1), pages 63-92, January.
    13. Francisco Rodríguez, 2006. "Openness and Growth: What Have We Learned?," Wesleyan Economics Working Papers 2006-011, Wesleyan University, Department of Economics.
    14. T. Gries & R. Grundmann & I. Palnau & M. Redlin, 2017. "Innovations, growth and participation in advanced economies - a review of major concepts and findings," International Economics and Economic Policy, Springer, vol. 14(2), pages 293-351, April.
    15. Matteo Cervellati & Alireza Naghavi & Farid Toubal, 2018. "Trade liberalization, democratization, and technology adoption," Journal of Economic Growth, Springer, vol. 23(2), pages 145-173, June.
    16. Philipp Heimberger, 2022. "Does economic globalisation promote economic growth? A meta‐analysis," The World Economy, Wiley Blackwell, vol. 45(6), pages 1690-1712, June.
    17. Mayberry, Anthony A., 2023. "Demilitarization and economic growth: Empirical evidence in support of a peace dividend," Journal of Comparative Economics, Elsevier, vol. 51(3), pages 960-988.
    18. Prema-chandra Athukorala & Hal Hill, 2010. "Asian trade: long-term patterns and key policy issues," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 24(2), pages 52-82, November.
    19. Berthold Herrendorf & Arilton Teixeira, 2005. "How Barriers to International Trade Affect TFP," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 8(4), pages 866-876, October.
    20. Anderson, Kym, 2004. "The Challenge of Reducing Subsidies and Trade Barriers," CEPR Discussion Papers 4592, C.E.P.R. Discussion Papers.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hur:ijarbs:v:4:y:2014:i:5:p:514-532. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hassan Danial Aslam (email available below). General contact details of provider: http://hrmars.com/index.php/pages/detail/IJARBSS .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.