IMPACT OF TRADE OPENNESS ON ECONOMIC GROWTH IN ANGLOPHONE ECOWAS COUNTRIES: THE MODERATING ROLE OF EXCHANGE RATE
Hassan Paul Abdullahi , Mike Duru, PhD, Ayodeji Salihu, Ph.D and Ilemobola Solomon Oyefabi, Ph.D
Volume 11 Issue 1
Abstract
This study investigates the impact of trade openness on economic growth in Anglophone ECOWAS countries using the Pooled Mean Group (PMG) estimator, which captures both short-run dynamics and long-run equilibrium relationships. The findings indicate that, in the long run, trade openness significantly boosts economic growth by 4.1%, with the interaction between trade openness and exchange rate contributing positively at 0.08%. Additionally, the exchange rate has a significant positive impact of 0.02% on long-term growth. However, in the short run, neither trade openness nor its interaction with the exchange rate significantly affects growth, although a strong adjustment toward long-run equilibrium is observed. Therefore, it is recommended that Anglophone ECOWAS countries adopt policies that promote trade openness while ensuring exchange rate stability, as both elements are crucial for long-term economic growth. Short-term strategies should also prioritise adjustments toward maintaining long-run equilibrium to sustain growth momentum. Key Words: Trade openness; Economic growth; Exchange Rate; Anglophone ECOWAS
Download Paper