Assessing the Impact of One Aspect of Globalization on Economic Growth in Africa

Posted: 3 Aug 2009

See all articles by Mina Baliamoune-Lutz

Mina Baliamoune-Lutz

University of North Florida ; Economic Research Forum; Policy Center for the New South

Date Written: August 3, 2009

Abstract

Using panel data, this paper explores the effects of openness to international trade and foreign direct investment (FDI) on economic growth. Fixed-effect and adjusted fixed effect (regional-effect) estimations yield results consistent with the hypothesis of conditional convergence. FDI has a significant positive impact on economic growth in all specifications. However, openness to trade does not seem to enhance growth in poor countries. The empirical findings fail to substantiate the proposition that greater openness facilitates convergence to higher income levels. On the contrary, there is evidence that greater openness to international trade promotes economic growth primarily in higher-income African countries, implying that threshold effects may be crucial to the effectiveness of openness. Furthermore, the results from the adjusted fixed-effect estimation appear to validate the claim of convergence clubs within Africa.

Keywords: Africa, conditional convergence, convergence clubs, economic growth

JEL Classification: C23, F43, O24, O55

Suggested Citation

Baliamoune-Lutz, Mina, Assessing the Impact of One Aspect of Globalization on Economic Growth in Africa (August 3, 2009). Available at SSRN: https://ssrn.com/abstract=1443097

Mina Baliamoune-Lutz (Contact Author)

University of North Florida ( email )

1 UNF Drive
Jacksonville, FL 32224-2645
United States

HOME PAGE: http://www.unf.edu/

Economic Research Forum ( email )

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Cairo
Egypt

HOME PAGE: http://erf.org.eg/

Policy Center for the New South ( email )

Campus of Mohammed VI Polytechnic University
Rabat, Rabat-Sale
Morocco

HOME PAGE: http://https://www.policycenter.ma/

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