Trade and economic growth: An econometric investigation of southern Africa

The objective of this dissertation is to examine the effect of recent trade policy changes on trade and economic growth for southern Africa. This is accomplished by using a dynamic panel data modeling approach to examine the effect of openness on economic growth during the 1990s. The gravity model and Tobit maximum likelihood estimation are used to examine the effect of trade policy changes and two types of spatial separation on the likelihood of trade. The two types of spatial separation are distance and preferential trading arrangements. This study uses sophisticated econometric techniques and a more complete sample of countries than previous studies on southern Africa.;The results show that distance impedes the likelihood of trade. Trade policy changes and the preferential trading arrangements, SADC and COMESA, enhanced trade in southern Africa during the 1990s. The trade stimulating effect was larger for SADC membership. However, some members benefited much more from the existence of preferential relations than other members. The study results indicate that openness affects economic growth.