Trade Policy and Economic Growth in Sub Saharan Africa: A Panel Data Approach
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Date
2011-06
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Addis Ababa University
Abstract
Despite a number of multi-country case studies utilizing comparable analytical
frameworks, numerous econometric studies using large cross-country data sets, and
important theoretical advances in growth theory, there is still disagreement among
economists concerning how a country's international economic policies and its rate of
economic growth interact. The central objective of this paper is to empirically assess the
link between trade policy and economic growth in Sub Saharan Africa countries. Apart
from reviewing different literatures, this study also provides empirical evidence on the
relationship between economic growth and trade policies. In doing so, the study uses a
panel data covering 47 Sub Saharan Africa countries over the periods 2000 – 2008. The
estimation support claims that openness to international trade stimulates both
economic growth and investment. Besides, trade policies such as average weighted tariff
rate and real effective exchange rate have both direct and indirect impacts on economic
growth.
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Keywords
Economic Growth in Sub Saharan Africa