Track openness and economic growth: The Zambian case; Expanse and economic growth: Example of Zambia

Since independence, Zambia has different trade policies aimed at enhancing benefits from international trade which in turn can promote economic growth and development. The aim of this study was to investigate the relationship between trade openness and economic growth for the Zambian Economy for the period 1980-2019. GDP growth, trade openness, FDI, industry value added, inflation, secondary school enrolment and terms of trade were the study variables. GDP growth, trade openness, FDI and terms of trade were I(0) whereas industry value added, inflation and secondary school enrolment were I(1). Thus, the ARDL approach was used as the method of estimation. Using a bounds testing procedure, it was found that cointegration exists among the study variables. The study found that trade openness has a negative effect on economic growth in the long run. Specifically, a 10 percent change in trade openness leads to a -1.38 percent change in economic growth. It was also found that when trade openness depends on FDI, secondary school enrolment and terms of trade, the effect on economic growth is positive. Thus, trade openness, FDI, inflation, secondary school enrolment and terms of trade complement each other to positively influence economic growth. Furthermore, FDI and secondary school enrolment have positive effects on economic growth in the long run. Terms of trade positively affects economic growth both in the long and short run whereas inflation has a positive effect on economic growth in the short run. On the other hand, industry value added a negative effect on economic growth in the long run. The study also found a unectional causal relationship running from trade openness to economic growth. The study recommends a cautious consideration of complementary variables to trade openness before promoting more openness to trade for the Zambian Economy. ; Since independence, Zambia has followed different trade policies aimed at increasing benefits from international trade, which can encourage economic growth and development. The purpose of this study is to explore the relationship between openness and economic growth for the period 1980-2019 for the Zambia economy. GDP growth, explicitness, DYY, industry added value, inflation, high school registration and trade limits are variables of work. GDP growth, explicitness, DYY and trade limits are I(0), while inflation, inflation and high school registration are I(1). For this reason, the ARDL approach is used as an estimate method. By using the border testing procedure, syntax among the included variables has been found to exist. In this study, explicit openness has a negative impact on economic growth in the long term. Specifically, a 10 % change in expanse leads to a change of -1.38 percent in economic growth. Where explicit explicitity depends on inflation, high school registration and trade limits, the impact on economic growth has been found to be positive. Explicitness, DYY, inflation, high school registration and trade limits are complementary variables that are positively affecting economic growth. Moreover, DG and high school registration were found to have positive impacts on economic growth in the long term. Foreign trade limits affect economic growth both in the long and short term, while inflation positively affects economic growth in the short term. On the other hand, the added value of industry has a negative impact on long-term economic growth. Furthermore, this study found a one-way causal relationship extending from outward to economic growth. The study also recommends careful assessment of complementary variables for explicit clarity before promoting more openness to trade for the growth of the Zambia economy.