TRADE OPENNESS, EXCHANGE RATE AND ECONOMIC GROWTH RELATIONSHIP IN SELECTED OPEC COUNTRIES
Mohammed A. San, A.A. Alexander, M. Muktar and Y. Alfa
Volume 7 Issue 1
Abstract
This study examines trade openness, exchange rate and economic growth relationship in selected OPEC countries. Four countries (Nigeria, Saudi Arabia, Venezuela and Indonesia) were selected from OPEC for the study. Annual panel data from World Bank Development indicators were collected on exchange rate (EXCR), gross domestic product growth rate (GDPG), trade openness (TRDO), oil price (OILP) and foreign reserve (FORR). The data were analyzed using the fixed and the random effect models of panel co-integration. Findings from the study show that trade openness, has a significant impact on economic growth of the four member countries of OPEC while the impact, on economic growth, of exchange rate is not significant. Based on the findings the study recommends that OPEC member countries should improve cooperation among economic actors by using export consortia to help SMEs in the region access the international markets. In addition, they should use long term export-led-growth policies such as export promotion policies and other domestic policies aimed at enhancing productivity and technological content of domestic products.
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