TITLE:
The Impact of Trade Openness on Economic Growth: Empirical Evidence from Madagascar
AUTHORS:
Mirana Annicet Rasoanomenjanahary, Liang Cao, Yanle Xi
KEYWORDS:
Madagascar, Trade Openness, GDP, VECM
JOURNAL NAME:
Modern Economy,
Vol.13 No.5,
May
27,
2022
ABSTRACT: The purpose of this research is to determine the
impact of trade openness on economic growth; nevertheless, the study of the
trade openness and economic growth nexus in Madagascar is still ongoing. As a
result, the link between trade openness and economic growth has been
intensively researched, with conflicting and inconclusive results. This study uses the Vector Error
Correlation Model techniques for the period 1993 to 2020. Specifically, the
empirical estimated results are sound evidence that there exists a long-run
cointegration among the variables. Our empirical findings further depict that trade openness has a negative effect on economic
growth in Madagascar. Moreover, this study demonstrates a positive and
significant complementary relationship between inflation, FDI net inflow, and
Labor force participation in strengthening economic growth. The study concluded
with the recommendation that policymakers should develop and execute trade laws
that are aimed at regulating various sources of import and export in the
country.