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Exports and economic growth: relationships and threshold analysis for the Southern Africa customs union

Author

Listed:
  • Oscar Chiwira

    (BA ISAGO University, Gaborone, Botswana)

  • Lovemore Muchingami

    (BA ISAGO University, Gaborone, Botswana)

  • Lawrence Jambani

    (BA ISAGO University, Gaborone, Botswana)

Abstract

This study examines the short-run and long-run relationships between exports and economic growth in the Sothern Africa Customs Union (SACU), as well as the corresponding threshold level. The study used panel data covering the period 1980 to 2021 and employed the Autoregressive Distributed Lag (ARDL) Bounds to test for co-integration relationships, and the Generalized Least Squares (GLS) to determine the respective threshold level. Exports positively support economic growth both in the short-run and in the long-run in SACU. There is long-run bidirectional causality between exports and economic growth. The minimum threshold for exports is 59%. That is, exports only start contributing significantly to economic growth when they are above 59% of the Gross Domestic Product (GDP). SACU should put in place economic policies and regulations that are skewed towards the improvement of the competitiveness of its local products on the global market and also strategically consider export-oriented industrialization strategies. Efforts should also be channeled towards the implementation of bilateral and multilateral trade agreements and harnessing the synergic benefits through the adoption of deliberate value chain mechanisms and initiatives. Key Words:Economic growth; Exports; co-integration; ARDL; SACU

Suggested Citation

  • Oscar Chiwira & Lovemore Muchingami & Lawrence Jambani, 2023. "Exports and economic growth: relationships and threshold analysis for the Southern Africa customs union," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 12(8), pages 274-288, November.
    • Handle: RePEc:rbs:ijbrss:v:12:y:2023:i:8:p:274-288
    DOI: 10.20525/ijrbs.v12i8.2912
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    1. Oscar Chiwira & Lovemore Muchingami & Lawrence Jambani, 2024. "Cointegrating and causality relationship between exports and economic growth: case for Botswana," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 13(5), pages 482-493, July.

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