DOES TRADE LIBERALIZATION AND INSTITUTIONAL QUALITY STIMULATE ECONOMIC GROWTH IN SUB-SAHARAN AFRICAN COUNTRIES?
Muhammad Yusuf and Auwal Abubakar Muhammad
Volume 3 Issue 2
Abstract
This paper examined the nexus between trade liberalization, institutional quality and economic growth in Sub-Saharan African Countries (SSA) Spanning the period 1999-2019. Panel Co-integration and Panel vector error correction mechanism where used as estimation technique to address the heterogeneity and cross-border interdependence. The findings of the study revealed that there is a long run stable co-integration relationship between trade liberalization, institutions and economic growth in Nigeria. Institutional quality can influence significantly economic growth in both short term and long term. The results also suggest that the coefficient of trade liberalization without the interactive effects of institutional quality do not significant impact on economic growth this implies that the impact of trade liberalization on economic growth is not direct one it requires the presences of institutional quality as a mediating variables. The policy implication of this study is that the existence of quality of institution is important for economic growth. Therefore, SubSaharan African Countries should develop sound institutions that will support trade liberalization policy and stimulate economic growth. Key Words: Panel Co-integration, Institutions, Liberalization, Economic Growth and Sub-Saharan African Countries
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