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Trade Openness and Total Sector Productivity in Zimbabwe: Empirical Analysis Using ARDL and Granger Casuality Approach

Author

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  • Lawrence Dumisani Nyathi

    (National University of Science and Technology, Lecturer-Department of Banking & Economic Sciences, Faculty of Business & Economic Sciences, Zimbabwe)

  • Mthulisi Nkala

    (Lupane State University, Graduating Candidate-Department of Accounting & Finance, Faculty of Commerce, Zimbabwe.)

  • Mbheki Mlobane

    (Lupane State University, Economist-Department of Accounting & Finance, Faculty of Commerce, Zimbabwe.)

Abstract

This study explores the relationship between trade openness and total sector productivity in Zimbabwe using the ARDL and Granger Casuality Approach covering the period 1990 to 2023. The bulk of economic literature do point out that trade openness is a potent catalyst for national development and productivity. Economic literature further provide evidence of the short- and long-term connections between trade openness and economic growth. Given that most nations now desire to generate wealth through international commerce and transfer technology, this study tackles significant issues about the relationship between trade openness and total sectorial productivity. The research findings indicate that trade openness and total sectoral productivity had a positive long-term association. The research also revealed that total sectoral productively is significantly related to inflation, exchange rate, unemployment and labour rate. Therefore, this paper recommends that policy makers and government negotiators in Zimbabwe should put policies that promote openness through the removal of trade barriers and export encouragement into effect in order to increase overall economic growth. In conclusion, some of the trade barriers that are deterring trade openness and productivity are solved if government of Zimbabwe implements a vibrant economy to boost productivity.

Suggested Citation

  • Lawrence Dumisani Nyathi & Mthulisi Nkala & Mbheki Mlobane, 2024. "Trade Openness and Total Sector Productivity in Zimbabwe: Empirical Analysis Using ARDL and Granger Casuality Approach," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(11), pages 2782-2793, November.
    • Handle: RePEc:bcp:journl:v:8:y:2024:i:11:p:2782-2793
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    References listed on IDEAS

    as
    1. Makochekanwa, Albert & Hurungo T. James & Kambarami Prosper, 2012. "Zimbabwe's Experience With Trade Liberalization," Working Papers d090c443-7015-4110-9b58-b, African Economic Research Consortium.
    2. Hlalefang Khobai & Nwabisa Kolisi & Clement Moyo, 2018. "The Relationship Between Trade Openness and Economic Growth: The Case of Ghana and Nigeria," International Journal of Economics and Financial Issues, Econjournals, vol. 8(1), pages 77-82.
    3. repec:aer:wpaper:b36b7566ee91 is not listed on IDEAS
    4. Kong, Qunxi & Peng, Dan & Ni, Yehui & Jiang, Xinyue & Wang, Ziqi, 2021. "Trade openness and economic growth quality of China: Empirical analysis using ARDL model," Finance Research Letters, Elsevier, vol. 38(C).
    5. Nikolaos Dritsakis & Pavlos Stamatiou, 2016. "Trade Openness and Economic Growth: A Panel Cointegration and Causality Analysis for the Newest EU Countries," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 18(59), pages 45-60, March.
    6. repec:aer:wpaper:245 is not listed on IDEAS
    7. Qazi Muhammad Adnan Hye & Wee-Yeap Lau, 2015. "Trade openness and economic growth: empirical evidence from India," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 16(1), pages 188-205, February.
    8. Sumbal Fatima & Bateer Chen & Muhammad Ramzan & Qamar Abbas, 2020. "The Nexus Between Trade Openness and GDP Growth: Analyzing the Role of Human Capital Accumulation," SAGE Open, , vol. 10(4), pages 21582440209, November.
    9. Khandaker Jahangir Alam & Khairul Kabir Sumon, 2020. "Causal Relationship between Trade Openness and Economic Growth: A Panel Data Analysis of Asian Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 10(1), pages 118-126.
    10. Maxwell Chukwudi Udeagha & Nicholas Ngepah, 2021. "The asymmetric effect of trade openness on economic growth in South Africa: a nonlinear ARDL approach," Economic Change and Restructuring, Springer, vol. 54(2), pages 491-540, May.
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