TITLE:
The Effect of Trade Openness on GDP Growth in Congo
AUTHORS:
Jean Michel Koutima-Banzouzi
KEYWORDS:
Trade Openness, GDP Growth, ARDL, Congo
JOURNAL NAME:
Theoretical Economics Letters,
Vol.13 No.1,
February
7,
2023
ABSTRACT: The objective of this paper is to analyze the effect of trade openness on
GDP growth in Congo. To this end, an economic analysis based on Autoregressive
distributed lag model (ARDL) and annual data covering the period 1979 to 2019
have been used. The results show that trade openness has a positive effect on
economic growth in Congo. Foreign direct investment (FDI), which is important
for technology transfer, has no effect on GDP growth. The low level of human
capital in the Congo may have contributed to this lack of effect of FDI
exerting a long-term depressive effect of investment (GFCF) on economic growth.
Another interpretation is that the gains from trade or the benefits of trade
openness are higher for more educated populations. As a result, in a country
where the oil industry (which is highly capital-intensive) accounts for 45% of
GDP, policy implications have been formulated to strengthen education and R
& D in order to reap the full benefits of trade openness.