Impact of trade openness on economic growth in WAEMU
Keywords:
trade openness, economic growth, threshold, quality of exportsAbstract
The objective of this paper was to determine the effect of trade openness on economic growth in WAEMU countries, focusing on the existence of a threshold effect and on the impact of export quality. To this end, a panel model was estimated using the Pool Mean Group (PMG) approach and the results showed that trade openness has a positive impact on economic growth when the degree of openness measured by (Exports of goods and services + Imports of goods and services)/GDP is below 61.2% of GDP. Above this threshold, the impact of trade openness on economic growth becomes negative. The results also show that without taking the threshold effect into account, trade openness has a negative impact on economic growth. In addition, the results of the study highlight that the improvement in the quality of exports combined with trade openness positively affects economic growth in the WAEMU.
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