University of Khartoum

Trade Policy and Economic Trade Policy and Economic Growth: An Empirical Examination Of Sudan Experience (1980-2007)

Trade Policy and Economic Trade Policy and Economic Growth: An Empirical Examination Of Sudan Experience (1980-2007)

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Title: Trade Policy and Economic Trade Policy and Economic Growth: An Empirical Examination Of Sudan Experience (1980-2007)
Author: Sara Kamal Yousif, Sulieman
Abstract: This study attempts to determine the relationship between trade policy and economic growth in Sudan during 1980-2007. The study focuses on a growth model, which was developed by Sebastian Edwards (1989). Contrary to the traditional models of growth, this model contains trade openness as a measure of the trade policy, technological gap and the traditional factors of growth such as capital and labor. Economic growth is measured by the annual rates of growth of real GDP. The study relates on secondary data, it also supposes that: the trade openness, the investment ratio and the population growth rate have positive effects on economic growth, while the technological gap has a negative effect on economic growth in Sudan during the study period. The stationarity test shows that some variables are stationary in levels, while some other variables are stationary in the first differences. The co- integration test indicates that, there is only one co- integrating or long run relationship between the variables at 5% significance level. The lagged residual from the long run relation is used as an independent variable besides the other variables to obtain the static short run relationship, through the application of the Ordinary Least Square (OLS) method. The lagged residual is also used to obtain the dynamic short run relation, through the application of the Vector Error Correction Model (VECM). Although the short run effects of the variables are less than the long run effects, both of them support the research hypotheses, the variables have the expected signs. In order to examine the existence of a causal relation between trade openness and economic growth, the Granger Causality Test is applied. The test shows that, there is no causal relationship between these variables. The most important finding of the estimation is that, there is a positive relationship between trade openness and economic growth in Sudan during the study period. I.e. trade openness has a positive and effective role in the economic growth process in Sudan. Accordingly more openness is required, through boosting the export sector. For promoting export, the productive sector can play an important role. This will lead to diversify the sources of growth. It is critically important to improve the infrastructure and to implement stabilization exchange rate policy
Description: Trade Policy and Economic Trade Policy and Economic Growth: An Empirical Examination Of Sudan Experience (1980-2007)
URI: http://khartoumspace.uofk.edu/handle/123456789/13691
Date: 2015-06-17


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