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Effects of Trade Openness on Economic Growth: The Case of African Countries

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  • Yeboah, Osei-Agyeman
  • Naanwaab, Cephas B.
  • Saleem, Shaik
  • Akuffo, Akua S.

Abstract

The relationship between trade and productivity has not been established theoretically. Some researchers have indeed found some, if not complete, support for the view that increasing openness has a positive impact on productivity. This study used a Cobb-Douglas production function as in Miller and Upadhyay (2000) to estimate the impact of FDI, exchange rate, capital-labor ratio and trade openness on GDP for 38 African countries from 1980 to 2008. Data were transformed to natural logs and estimated using alternative panel models; which included one- or-two-way fixed or random effects models. The results found trade openness having a positive relationship with GDP; which is comparable to findings of Ahmed et al.; (2008).

Suggested Citation

  • Yeboah, Osei-Agyeman & Naanwaab, Cephas B. & Saleem, Shaik & Akuffo, Akua S., 2012. "Effects of Trade Openness on Economic Growth: The Case of African Countries," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119795, Southern Agricultural Economics Association.
  • Handle: RePEc:ags:saea12:119795
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    File URL: http://ageconsearch.umn.edu/record/119795/files/Yeboah_Saleem_Naanwaab_Akuffo-SAEA%202012%20II32.pdf
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    References listed on IDEAS

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    1. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
    2. Kishor Sharma, 2000. "Export Growth in India: Has FDI Played a Role," Working Papers 816, Economic Growth Center, Yale University.
    3. Asafu-Adjaye, John & Chakraborty, Debasish, 1999. "Export-Led Growth and Import Compression: Further Time Series Evidence from LDCs," Australian Economic Papers, Wiley Blackwell, vol. 38(2), pages 164-175, June.
    4. Abdullahi Ahmed & Enjiang Cheng & George Messinis, 2011. "The role of exports, FDI and imports in development: evidence from Sub-Saharan African countries," Applied Economics, Taylor & Francis Journals, vol. 43(26), pages 3719-3731.
    5. Sjoholm, Fredrik, 1999. "Exports, Imports and Productivity: Results from Indonesian Establishment Data," World Development, Elsevier, vol. 27(4), pages 705-715, April.
    6. Sharma, K., 2000. "Export Growth in India: Has FDI Played a Role?," Papers 816, Yale - Economic Growth Center.
    7. Balassa, Bela, 1978. "Exports and economic growth : Further evidence," Journal of Development Economics, Elsevier, vol. 5(2), pages 181-189, June.
    8. Arne Bigsten & Paul Collier & Stefan Dercon & Marcel Fafchamps & Bernard Gauthier & Jan Willem Gunning & Jean Habarurema & Abena Oduro & Remco Oostendorp & Catherine Pattillo & Måns Söderbom & Francis, 2000. "Exports and firm-level efficiency in African manufacturing," CSAE Working Paper Series 2000-16, Centre for the Study of African Economies, University of Oxford.
    9. Sharma, Kishor, 2000. "Export Growth In India: Has FDI Played a Role?," Center Discussion Papers 28372, Yale University, Economic Growth Center.
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    Cited by:

    1. 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.
    2. Nazia Anjum & Zahid Perviz, 2016. "Effect of Trade Openness on Unemployment in Case of Labour and Capital Abundant Countries," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 5(1), pages 44-58, March.
    3. KAFANDO, Namalguebzanga, 2014. "L'industrialisation de l'Afrique: l'importance des facteurs structurels et du régime de change
      [The industrialization of Africa: the importance of structural factors and exchange rate regime]
      ," MPRA Paper 68736, University Library of Munich, Germany.

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    Keywords

    International Development; International Relations/Trade; Productivity Analysis;

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