Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/227206 
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13679
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper empirically tests the hypothesis that trade can act as an engine of growth using panel data for the Southern African Development Community (SADC), a regional integration agreement (RIA) organization, the central objective of whose formation was the need to accelerate, foster, and encourage the region's growth. Our results indicate that during the period covered by this study (2005-2017), export expansion stimulated growth, more openness to trade reduced it, and that the formation of SADC had not yet brought about any effects on growth perhaps because of lack of full establishment of the primary instruments for achieving its central objective. These results lead to three conclusions. Firstly, trade through export expansion seems to be a better solution for SADC for achieving the central objective of its formation. Secondly, more openness to trade seems to jeopardize growth. Finally, the formation of SADC has not yet brought about the expected gains from a RIA. In this context, we recommend that policymakers should consider adopting measures aimed at supporting increased trade through promoting export expansion, achieving strong absorption of negative chocks that usually result from trade, and exploring the possibility of establishing all the planned primary instruments for achieving SADC's central objective.
Subjects: 
international trade
regional integration agreements
free trade area
customs union
Prebish-Singer Hypothesis
JEL: 
F15
F36
F43
O43
O47
Document Type: 
Working Paper

Files in This Item:
File
Size
314.97 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.