Trade Policy and Economic Growth in Sub-Saharan Africa: A Panel Data Approach

Posted: 20 Jul 2015 Last revised: 24 Feb 2017

Date Written: December 30, 2014

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 used 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.

Keywords: Tariffs, Real effective exchange rate, Growth, Cross country analysis

Suggested Citation

Asfaw, Henok Arega, Trade Policy and Economic Growth in Sub-Saharan Africa: A Panel Data Approach (December 30, 2014). American Journal of Trade and Policy, Vol. 1, No. 3, pp. 94-101, 2014. Available at SSRN: https://ssrn.com/abstract=2633126

Henok Arega Asfaw (Contact Author)

National Bank of Ethiopia ( email )

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