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Imports and economic growth in Africa: Testing for granger causality in the frequency domain

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  • Olufemi Adewale Aluko
  • Patrick Olufemi Adeyeye

Abstract

In this paper, we test for causality between imports and economic growth in 41 African countries. We differ from earlier studies by testing for causality at high and low frequency levels, that is, in the short and long run, respectively. In doing so, we employ a frequency domain Granger causality test robust to pretest biases relating to unit root and cointegration tests. We document that there is: (i) unidirectional causality running from imports and economic growth in 7 countries in the short run and 5 countries in the long run, (ii) unidirectional causality running from economic growth to imports in 4 countries in the short run and 10 countries in the long run, (iii) bidirectional causality in only one country in the short run and 3 countries in the long run, and (iv) no causality in 29 countries in the short run and 23 countries in the long run. Our findings suggest that, for the most part, the neutrality hypothesis is valid in the short- and long-run periods. We imply from our findings that possible changes in the causality dynamics between imports and economic growth over time should be taken into consideration before designing policies.

Suggested Citation

  • Olufemi Adewale Aluko & Patrick Olufemi Adeyeye, 2020. "Imports and economic growth in Africa: Testing for granger causality in the frequency domain," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 29(7), pages 850-864, October.
    • Handle: RePEc:taf:jitecd:v:29:y:2020:i:7:p:850-864
    DOI: 10.1080/09638199.2020.1751870
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    Cited by:

    1. Khalid Usman & Usman Bashir, 2022. "The Effects of Imports and Economic Growth in Chinese Economy: A Granger Causality Approach under VAR Framework," JRFM, MDPI, vol. 15(11), pages 1-14, November.
    2. Mohamad A. Abou Hamia, 2022. "What level of international technology should developing countries transfer to sustain their economic growth?," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(6), pages 4217-4239, December.
    3. Bernd Süssmuth, 2022. "The mutual predictability of Bitcoin and web search dynamics," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 41(3), pages 435-454, April.
    4. Jean-François Hoarau & Nicolas Lucic, 2022. "Are real merchandise imports per capita a good predictor for the standard of living for the small island world: Testing for the imports-led growth and the growth-led imports hypotheses in panels over ," TEPP Working Paper 2022-16, TEPP.
    5. Akermi, Najwa & Ben Yedder, Nadia & Bakari, Sayef, 2023. "Impact of Final Consumption, Domestic Investment, Exports, and Imports on Economic Growth in Albania," MPRA Paper 118308, University Library of Munich, Germany.
    6. Arvian Triantoro & Muhammad Zaheer Akhtar & Shiraz Khan & Khalid Zaman & Haroon ur Rashid Khan & Abdul Wahab Pathath & Muhamad Amar Mahmad & Kamil Sertoglu, 2023. "Riding the Waves of Fluctuating Oil Prices: Decoding the Impact on Economic Growth," International Journal of Energy Economics and Policy, Econjournals, vol. 13(2), pages 34-50, March.
    7. Raga M. Elzaki, 2023. "Impact of Financial Development Shocks on Renewable Energy Consumption in Saudi Arabia," Sustainability, MDPI, vol. 15(22), pages 1-23, November.

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