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The effect of agricultural trade openness on economic growth in the East African Community

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  • Daniel Otieno Jabuya
  • Fredrick Odhiambo Sule
  • Michael Jairo Ndwiga

Abstract

The study examined the effects of agricultural trade openness on economic growth in the EAC. We empirically analyzed the issue in five countries from 2000 to 2021. Panel data estimation methods were used in the study. The variables were found to be integrated of order one and zero. There was presence of cointegration, cross-sectional heterogeneity and cross-sectional dependence. The CS-ARDL results revealed that agricultural trade openness and economic growth enjoyed a long-run relationship. The empirical results indicated that the effect of agricultural trade openness on economic growth was positive and significant in the long run. Bootstrap panel granger causality analysis was applied in testing the nature and direction of causal relationships between variables. The results indicated that a unidirectional causal relationship existed between agricultural trade openness and economic growth. This implies that an increase in trade openness promotes economic growth. Based on the findings of the study, we recommend that strategies aimed at promoting trade openness should be complemented with strong policies to enable EAC countries to reap more growth benefits associated with open trade.

Suggested Citation

  • Daniel Otieno Jabuya & Fredrick Odhiambo Sule & Michael Jairo Ndwiga, 2023. "The effect of agricultural trade openness on economic growth in the East African Community," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(2), pages 2250632-225, October.
    • Handle: RePEc:taf:oaefxx:v:11:y:2023:i:2:p:2250632
    DOI: 10.1080/23322039.2023.2250632
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