The asymmetric nexus between regional trade and economic growth: A case for Namibia
Loading...
Date
2023
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
University of Namibia
Abstract
This paper investigates the nonlinear nexus between trade and economic
growth at a country level against that of regional level using Namibia as a
laboratory provoked by inconsistent, diverging and polarized evidence in
antecedent literature. The study uses a multilayered approach to measure the
impacts of trading with regional blocs on Namibia’s economic growth
compared to that of trading as a sole country and the direction of causality
between trade and growth. For country (regional) level analysis, annual time
series (panel) data over 1980-2020 (2005-2020) was employed to assess the
nonlinear relationship between trade and economic growth in the short and
long term for Namibia and its regional blocs partners. The study employs the
nonlinear ARDL (NARDL), which allows for a distinction between the effect
of positive and negative shocks in the underlying policies. The Wald tests for
robustness validity of asymmetric relations was applied. Findings reveals that
increased exports are positively related to growth at all levels, while increased
imports were found to be contributing to growth only at regional levels. When
comparing country level results against regional results, findings show that
Namibia benefits more in terms of exports when trading as a sole country.
While, in terms of imports, Namibia benefits more by trading with regional
blocs. Results show that negative shocks in exports have huge impact than
positive shocks at country level, while at regional level, positive shocks have
huge impact than negative shocks. Moreover, causality results reveal
bidirectional causality between exports and economic growth as well as
between exports and imports at regional and country level. To absorb
Namibian exports towards accelerated growth benefits more value addition
across the SADC, SACU and CMA and structural reforms fostering regional
trade are recommended
Description
A thesis submitted in partial fulfilment of the requirements for the degree of master of science in economics
Keywords
Trade, Nonlinear Autoregressive Distributed, Economic Growth, Southern African Development Community, SACU, CMA, Ex_pos, Ex_neg, Im_pos, Im_neg