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More Trade, More Wealth? Impact of Trade on the Economic Development of African Developing Countries

  • Ondřej DvouletýEmail author
Chapter
Part of the Contributions to Economics book series (CE)

Abstract

Many scholars have investigated the association between trade openness and the economic development. Does the assumption “more trade, more wealth” as outlined by the World Trade Organization (WTO) actually work? This chapter focuses only on the African developing countries during years 1991–2016, and the impact of international trade on a country’s GDP and GNI per capita is analyzed. Empirically, the approach is based on panel regressions and Granger causality tests. A positive impact of international trade on a country’s economic situation is found, which is mainly driven by the export activity. However, it fails to statistically prove any impact of the import activity. Finally, the results of the Granger causality tests show that the relationship between international trade and GDP and GNI per capita is unidirectional. These findings lead to believe that scholars should investigate more carefully the role of barriers to trade in the developing countries. Future researchers are also encouraged to conduct individual country analyses with multiple countries and to enrich academia for the cross-country variation in the obtained findings.

Keywords

Economic development International trade Trade openness Africa Wealth of nations 

Notes

Acknowledgment

This work was supported by the Internal Grant Agency of the Faculty of Business Administration, University of Economics in Prague under no. IP300040.

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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  1. 1.Department of Entrepreneurship, Faculty of Business AdministrationUniversity of EconomicsPragueCzech Republic

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