Trade Liberalization and Agricultural Growth in Africa: A friend or foe?
Author(s)
Stephen Oppong , Prof. Jiang Xinying , Francis Amoako , Prince Badu-Botah , Stephen Addai-Dansoh ,
Download Full PDF Pages: 122-132 | Views: 968 | Downloads: 253 | DOI: 10.5281/zenodo.3613399
Abstract
With the aim of assessing the impact that trade liberalization has on agricultural growth as in value added in Africa, the study uses trade openness as a proxy measure of trade liberalization to ascertain whether it has a substantial impact on agricultural value added in Africa. The data for the study were sampled from 1996 to 2017 and were sourced from World Development Indicators and Worldwide Governance Indicators for a panel of 34 African countries. The study’s findings confirm that there is an inverse relationship between trade liberalization and agricultural growth in Africa and it also witnessed evidence of bidirectional homogeneous causality between agricultural export performance, trade liberalization, and employment in the agricultural sector, economic growth, government effectiveness and agricultural growth. However, increasing the agricultural export share in Africa could result in agricultural growth. The study used GLS random effects, fixed effects, generalized linear model and multivariate regressions to analyze its data in drawing its conclusion.
Keywords
Trade liberalization; Africa; Agricultural growth; Generalized linear model; Multivariate regression
References
i. Anderson, K. (1997). On the Complexities of China’s WTO Accession. The World Economy, 20 (6).
ii. Balassa, B. (1978) Exports and Economic Growth: Further Evidence, Journal of Development Economics, 5 (2).
iii. Chand, R. (2004). Impact of Trade Liberalization and Related Reforms on India’s Agricultural Sector, Rural Food Security, Income and Poverty, Paper Submitted to the 5th Annual Conference of GDN.
iv. Dollar, D. (1992). Outward Oriented Developing Economies Really Do Grow More Rapidly: Evidence from 95 LDCs, 1976-85. Economic Development and Cultural Change, 40(3).
v. Dollar, D., Kraay, A. (2000) Growth is Good for the Poor, World Bank Policy Research Working Paper No. 2587, World Bank: Washington D.C., also reprinted in Journal of Economic Growth, 7(3).
vi. Dumitriscu, E.I., Hurlin, C. (2012). “Testing for Granger non-causality in heterogeneous panels”. Econometric modelling 2, 1450 -1460.
vii. Edwards, S. (1998). Openness, Productivity and Growth: What do we really know? Economic Journal, 108 (447).
viii. Feder, G. (1982). On Exports and Economic Growth, Journal of Development Economics, 12(1&2).
ix. Fonchamnyo, C.D., Akame, A.R., 2017. Determinants of export diversification in Sub-Saharan Africa: a fractionalized logit estimation model. J. Econ. Financ. 41, 330–342.
x. Goldin, I., Knutsen, O. (1990 Ed.). Agricultural Trade Liberalization: Implication for Developing Countries, OECD: Paris and World Bank: Washington D.C.
xi. Gulati, A. (2003). India, in M. D. Ingco [Edt]: Agriculture, Trade and the WTO in South Asia, World Bank: Washington D.C, 2003.
xii. Gulati, A and G. Pursell (1991). Trade Policies, Incentives and Resource Allocation in Indian Agriculture, mimeo, World Bank: Washington D.C.
xiii. Gulati, Ashok and A. Sharma (1994). Agriculture under GATT: What it holds for India? Economic and Political Weekly, 29 (29).
xiv. Hausmann, R., Hwang, J., Rodrik, D. (2007). What you export matters. J. Econ. Growth 12 (1), 1–25.
xv. Huang, J., Chunlai, C. (1999). Effects of Trade Liberalization on Agriculture in China: Institutional and Structural Aspects, Working Paper No. 42, Regional Co-ordination Centre for Research and Development of Coarse Grains, Pulses, Roots and Tuber Crops in the Humid Tropics of Asia and the Pacific (CGPRT Centre), UN/ESCAP.
xvi. Huang, J., Chunlai, C., Scott, R., Francis, T. (2003). Trade Liberalization and China’s Food Economy in the 21st Century: Implications to China’s National Food Security, in Scott Rozelle and Daniel Summer (Edt): Agricultural Trade and Policy in China: Issues, Analysis and Implications, Ashgate Publishing Limited: Aldershot, 2003.
xvii. Imbs, J., Wacziarg, R. (2003). Stages of diversification. Am. Econ. Rev. 93 (1), 63–86.
xviii. Im, K.S., Pesaran, M.H., Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of Econometrics 115, 53 – 57.
xix. Jha, V, S. Gupta, J. Nedumpara and K. Karthikeyan (2005). Trade Liberalization and Poverty in India, Macmillan India Limited: New Delhi.
xx. Kao, C., Chiang, M.H. (2000). On the estimation and inference of a cointegrated regression in panel data. Advanced Econometrics 15, 179 – 222.
xxi. Koning, Niek and Pinstrup-Andersen, Per [Edt 2007]: Agricultural Trade Liberalization and the Least Developed Countries, Springer: New York.
xxii. Krueger, Anne O. (1995). Trade Policy and Economic Development: How We Learn, American Economic Review, 87(1).
xxiii. Levine, R. and D. Renelt (1992). A Sensitivity Analysis of Cross-Country Growth, American Economic Review, 82 (4).
xxiv. Levin, A., Lin, C.F., Chu, C. (2002). Unit root tests in panel data: asymptotic and finite sample properties. Journal of Econometrics 108, 1 – 24.
xxv. Li, N. (2005). China’s Food Economy and its Implications for the Rest of the World, in Yum K. Kwan and Eden S. H. Yu [Edt]: Critical Issues in China’s Growth and Development, Ashgate Publishing Limited: Aldershot.
xxvi. Lu, F. (2000). China’s Grain Economy and Trade Policy, in Sarah Cook, Shujie Yao and J. Zhuang [Edt]: The Chinese Economy under Transition, Macmillan Press Limited: Houndmills.
xxvii. Martin, W., Winters, A. (1996). The Uruguay Round and the Developing Countries, Bank: Cambridge University Press: Cambridge.
xxviii. Nayyar D., Abhijit S. (1994). International Trade and the Agricultural Sector in India, in G. S. Bhalla [Edt]: Economic Liberalization and Indian Agriculture, Institute for Studies in International Development, New Delhi. 2004.
xxix. Maddala, G.S., Wu, S. (1999). A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and Statistics 61, 631 – 652.
xxx. Michaely, M. (1977). Exports and Growth: An Empirical Investigation, Journal of Development Economics, 4 (1).
xxxi. Patrick, N.O., Amelia, U.S-P., Berna, D. (2018). Trade dependence, Liberalization and Exports diversification in developing countries. Journal of African Trade 5, 19-34.
xxxii. Parikh, K. S. (2004). Agricultural Trade Liberalization Impact of Alternative Proposals on India, A Study prepared for United Nations Conference on Trade and Development, Integrated Research and Action for Development (IRADe): New Delhi.
xxxiii. Pedroni, P. (2004). Panel cointegration: Asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis: New results. Economic Theory 20, 597 – 627.
xxxiv. Pursell, G., Gulati, A. (1995). Liberalizing Indian Agriculture: An Agenda for Reforms, in Robert Cassen and Vijay Joshi [Edt]: India: The Future of Economic Reforms, Oxford University Press : Delhi.
xxxv. Rodriguez, F., Rodrik, D. (2001). Trade Policy and Economic Growth: A Skeptics Guide to the Cross-National Evidence, in B. Bernanke and K. S. Rogoff [Edt]: NBER Macro Economic Annual, 2000, MIT Press: Cambridge.
xxxvi. Sachs, J.D., Warner, A. (1995). Economic Reforms and the Process of Global Integration, Brookings Papers on Economic Activity, No.1, pp. 1-118.
xxxvii. Storm, S. (2001). Opening up India’s Agriculture: Close versus Strategic Integration, in S. Storm and C.W.M. Naastepad [Edt]: Globalization and Economic Development, Edward Elgar: Cheltenham.
xxxviii. Surajit, D. (2010). Can Trade Liberalization promote Growth in Agriculture: Evidence from China and India. Paper Presented at the 13th Annual Conference on Global Economic Analysis. Sustainable and Inclusive Trade for Growth and Development, UNESCAP, Bangkok, June, 9-11, 2010.
xxxix. Wacziarg, R. (2001). Measuring the Dynamic Gains from Trade, World Bank Economic Review, 15 (3).
xl. World Bank (1991). China: Options for Reforms in the Grain Sector, World Bank, Washington D.C.
xli. World Bank (2003). Global Economic Prospects: Realizing the Development Promise of the Doha Agenda, World Bank: Washington D.C.
xlii. World Development Indicators
xliii. Worldwide Governance Indicators
Cite this Article: