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The Effect of Exports in SACU Countries: An Empirical Analysis Using Panel Data

Author

Listed:
  • Sunde, Tafirenyika
  • Ogbokor, Cyril A.

Abstract

Simultaneity bias is an issue that does arise in most cases when all variables in a model are interdependent. The study responds to this challenge by employing panel data models to analyse the effects of exports in SACU countries. The study applies stationary data estimation techniques to a sample of five (5) SACU countries over the period 1980-2016. The study finds that exports positively and significantly affect GDP per capita in SACU region. In addition, the fixed effects and random effects models show that heterogeneity effects are significant, while the time effects are not significant in explaining the GDP per capita in the SACU region. This implies that country differences such as institutional, political and economic policy systems, among others, not included in the models are significant in explaining GDP per capita in SACU region. Finally, the study finds that SACU countries are enjoying increasing returns to scale. On the policy front, it should be noted that the long-standing trade liberalization and trade openness agendas of SACU have had a significant impact on economic growth and this has led to an upsurge in exports. Therefore, the SACU region must focus more on structural transformation which involves moving their specialisation patterns to more sophisticated goods and services to bolster their comparative advantage in international markets which affect economic growth through exports.

Suggested Citation

  • Sunde, Tafirenyika & Ogbokor, Cyril A., 2018. "The Effect of Exports in SACU Countries: An Empirical Analysis Using Panel Data," MPRA Paper 86502, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:86502
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    File URL: https://mpra.ub.uni-muenchen.de/86502/1/MPRA_paper_86502.pdf
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    References listed on IDEAS

    as
    1. Albert H. De Wet & Reneé Van Eyden, 2005. "Capital Mobility In Sub-Saharan Africa: A Panel Data Approach," South African Journal of Economics, Economic Society of South Africa, vol. 73(1), pages 22-35, March.
    2. Balassa, Bela, 1978. "Exports and economic growth : Further evidence," Journal of Development Economics, Elsevier, vol. 5(2), pages 181-189, June.
    3. Emine KILAVUZ & Betül ALTAY TOPCU, 2012. "Export and Economic Growth in the Case of the Manufacturing Industry: Panel Data Analysis of Developing Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 2(2), pages 201-215.
    4. Philip Arestis & Michelle Baddeley & Malcolm Sawyer, 2007. "The Relationship Between Capital Stock, Unemployment And Wages In Nine Emu Countries," Bulletin of Economic Research, Wiley Blackwell, vol. 59(2), pages 125-148, April.
    5. repec:mir:mirbus:v:7:y:2017:i:12:p:1-9 is not listed on IDEAS
    6. Ferda Halicioglu, 2007. "A Multivariate Causality Analysis of Export and Growth for Turkey," EERI Research Paper Series EERI_RP_2007_05, Economics and Econometrics Research Institute (EERI), Brussels.
    7. repec:dug:actaec:y:2016:i:5:p:266-278 is not listed on IDEAS
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    More about this item

    Keywords

    GDP per capita; exports; panel models; pooled model; fixed effects model; random effects model; SACU;

    JEL classification:

    • F1 - International Economics - - Trade
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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