The Growth Implication of Trade Liberalization in West Africa

Umoh, Okon J. and Onye, Kenneth U. (2013): The Growth Implication of Trade Liberalization in West Africa. Published in: IOSR Journal of Economics and Finance (IOSR-JEF) , Vol. 1, No. 1 (2013): pp. 15-21.

Abstract

This study empirically investigates the growth implication of trade liberalization in twelve West African (WA) countries using time series data for the period of 1970-2011. Relying on a Vector error correction model (VECM), our result indicates that trade orientation (trade policy variable) investment rate and exports shocks have significant positive impact on growth in 8 out of 12 WA economies. This suggests that it is possible to stimulate economic growth in some African countries through an outward-looking strategy of export expansion. We, thus, conclude that WA economies can vigorously pursue trade liberalization in order to enhance their growth performance. The caveat is that this would require a refocusing of domestic production capacity to commodity lines that overlap those of the trading partners, especially those of the OECD nations, so as to be able to garner the benefits derivable from liberal trade policy.

• Item Type: MPRA Paper
• Language: English
• Keywords: Liberalization, Economic Growth, West Africa, VECM
• Subjects: F - International Economics > F1 - Trade; F - International Economics > F1 - Trade > F15 - Economic Integration; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence

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