A Dynamic Panel Analysis of the Determinants of Economic Growth in Some Selected Sub-Sahara African Countries
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Global Advanced Research Journal of Management and Business Studies (GARJMBS)
The preoccupation of this study is to examine the cointegrating relationship and direction of causality between trade openness, foreign direct investment, domestic investment, government expenditure and economic growth for a panel of 17 highly aid-dependent Sub-Sahara African countries, for the period 1975- 2010. The selected countries are: Benin, Botswana, Burkina Faso, Cameroon, Cote d’Ivoire, Gabon, Gambia, Ghana, Kenya, Liberia, Malawi, Nigeria, Senegal, Sierra Leone, Togo, Zambia and Zimbabwe. The Kao and the Johansen-Fisher panel cointegration tests identify cointegrating relationships between the panel variables. The long-run effects of trade openness, domestic investment and government expenditure on economic growth are significantly positive. However, the long-run effect of foreign direct investment on economic growth is insignificant. The direction of causality between the panel variables is also examined by performing the Engle and Granger (1987) test on the first-differenced variables. Since the long-run elasticities of economic growth with respect to trade openness, domestic investment and government expenditure are greater than the short-run elasticities, it is recommended that greater openness to international trade and increases in domestic investment and government expenditure will expectedly raise the economic growth of the Sub-Sahara African countries.
Dynamic Panel , Trade Openness , Investment , Economic Growth , Research Subject Categories::SOCIAL SCIENCES::Business and economics::Economics
Omojolaibi, J.A. and Ogunniyi, M.B. (2014): A Dynamic Panel Analysis of the Determinants of Economic Growth in Some Selected Sub-Sahara African Countries. Global Advanced Research Journal of Management and Business Studies (GARJMBS) ISSN: 2315-5086. April 2014 Vol. 3 N0 4. Pp 160-165.