Trade openness and economic growth in East African Community economies: A panel causality test

Abstract. In spite of financial liberalization that has been discussed and studied over the past decades, the debate for the East African Community (EAC) still remain open on the relationship between trade openness and economic growth that has a link with trade-economic policies. This paper analyzes the relationship by employing the modern methodology of Dumistrescu & Hurlin (2012) Panel Causality test, The Test involved a scope of 46 years from 1970-2016. The empirical finding shows that there is a bidirectional movement (causality) as trade openness increase or relaxed lead to the growth of the economy in the East African Community. The results are supported by the endogenous growth theory that openness increases economic growth. There is a feedback relationship. The main operational implication of these empirical results is that the governments of the East African economies should dismantle barriers to trade to make sure that their intended objective is not ephemeral.Keywords. East African Community, Economic growth, Panel causality test, Trade openness.JEL. C59, F43, O24

Export-Led Growth Hypothesis: Evidence from Agricultural Exports in Tanzania

This study examines the nature and direction of causality in Tanzania between economic growth and agricultural exports along with some selected variables such as labour force and domestic investment. The analysis for this study was carried out using time series data for the period of 1980 to 2013. The data series were tested for stationarity using Phillips-perron test and the results revealed that they were all stationary and integrated of order one I(1). The Johansen test of cointegration revealed that there are cointegrating vectors in the system. The Granger causality test results revealed no any support of the export-led growth (ELG) hypothesis for Tanzania. However, the growth-led exports (GLE) hypothesis for Tanzania was supported by the results of this study, implying that the government of Tanzania needs to promote growth in order to generate exports