Liberia is labeled at the peak considered as one of the poorest countries
in the world. Therefore, Liberia needs to take an effective trade policy
approach to promote both domestic and international trade facilitation if it is
to achieve sustainable and further economic growth. International trade is the
engine for economic development, and it has become one of many economic
discussions not only among West African States and member countries but globally that Liberia is no
exception to since exports-trade leads to GDP growth and economic development.
As a result of frequent trade deficits and Liberia’s economic reliance on
extractive commodities for trade in agricultural goods, the study sought to
analyze the role of exports-trade on economic growth and development with
regard to Liberia. The study was conducted using secondary data generated from the World Bank Development Indicators (WBDI)
for the period 2000-2019. The study employed a time series regression
model of the Ordinary Least Squares (OLS) and technique by Stock and Wilson
(1988) to analyze Liberia’s trade performance using macroeconomic
indicators/variables that have an effect on economic growth, such as, Exports, Foreign
Direct Investment (FDI), Population growth, Imports, Gross Fixed Capital
Formation, (GFCF) and Gross Domestic Product (GDP) as the key indicators of
analysis. The regression results obtained from the study on the Ordinary Least
Squares tests show a linear association and a straight-line relationship among
the variables, namely: export, foreign direct
investment, population and economic growth in Liberia. With the estimated results, import has a
negative impact and relationship with Liberia’s GDP growth. The effect of
export was positive and highly statistically significant.
References
[1]
Ahmed, A. D. (2008). The Role of Exports, FDI and Imports in Development: New Evidence from Sub-Saharan African Countries. Centre for Strategic Economic Studies, Working Paper No. 39.
[2]
Al-Yousif, Y. K. (1999). On the Role of Exports in the Economic Growth of Malaysia: A Multivariate Analysis. International Economic Journal, 13, 67-75.
https://doi.org/10.1080/10168739900000006
[3]
Andrews, A. P. (2015). Exports, Imports, and Economic Growth in Liberia: Evidence from Causality and Cointegration Analysis.
https://pdfs.semanticscholar.org/e423/9bd636c076456ad01410b900f082a79bc646.pdf
[4]
Bahmani-Oskooee, M. M. (1991). Exports, Growth and Causality in LDCs: A Reexamination. Journal of Development Economics, 36, 405-415.
https://doi.org/10.1016/0304-3878(91)90044-V
[5]
Cole, A. A. (2012). Role of Export in Simulating Economic Growth and Development in Nigeria. In Proceedings of 2012 National Conference on National Security and Economic Development for Democratic Consolidation (pp. 1-3). Ikorodu, Lagos State, Nigeria: Researchgate.
https://www.researchgate.net/profile/Suraju_Aminu/publication/327445547_role_of_export_in_
stimulating_economic_growth_and_development_in_nigeria/links/5b8fed3f299bf114b7f6cd48/role-of-export-in-stimulating-economic-growth-and-development-in-nigeria.pdf
[6]
Ee, C. Y. (2016). Export-Led Growth Hypothesis: Empirical Evidence From. Procedia Economics and Finance, 35, 232-240. https://doi.org/10.1016/S2212-5671(16)00029-0
[7]
Firestone (2019). Investing in Liberia. Monrovia: Firestone Natural Rubber Company Liberia. https://www.firestonenaturalrubber.com
[8]
Giles, A. J. (2000). Export-Led Growth: A Survey of the Empirical Literature and Some Non-Causality Results Part 1. Econometric Working Paper, EWP0001, Victoria: University of Victoria. https://doi.org/10.2139/ssrn.146208
[9]
Hsiao, M. C. (1987). Tests of Causality and Exogeneity between Exports and Economic Growth: The Case of the Asian NICs. Journal of Economics Development, 12, 143-159.
[10]
IMF (2013). World Economic Outlook April 2013. Washington DC: International Monetary Fund. http://www.imf.org/external/pubs/ft/weo/2013/01/pdf/text.pdf
[11]
Ismail, A. G. (2003). Export and Economic Growth: The Causality Test for ASEAN Countries. Journal Ekonomi Pembangunan, 8, 89-95.
[12]
Jaffee, D. (1985). Export Dependence and Economic Growth: A Reformulation and Respecification. Social Forces, 64, 102-118. https://doi.org/10.1093/sf/64.1.102
[13]
Jung, W. S. (1985). Exports, Growth and Causality in Development Countries. Journal of Development Economist, 18, 1-12. https://doi.org/10.1016/0304-3878(85)90002-1
[14]
Konya, L. (2006). Exports and Growth: Granger Causality Analysis on OECD Countries with a Panel Data Approach. Economic Modelling, 23, 978-992.
https://doi.org/10.1016/j.econmod.2006.04.008
[15]
Levin, A. A. (1997). Complementarities between Exports and Human Capital: Evidence from the Semi-Industrialized Countries. Economic Development and Cultural Change, 46, 155-174. https://doi.org/10.1086/452325
[16]
Love, J. A. (2005). Testing Export-Led Growth in Bangladesh in a Multivariate VAR Framework. Journal of Asian Economics, 15, 1155-1168.
https://doi.org/10.1016/j.asieco.2004.11.009
[17]
Porter, M. E. (1990). The Competitive Advantage of Nation. New York: Free Press.
https://doi.org/10.1007/978-1-349-11336-1
[18]
Rahmaddi, R. A. (2011). Exports and Economic Growth in Indonesia: A Causality Approach Based on Multi-Variate Error Correction Model. Journal of International Development and Cooperation, 17, 53-73.
[19]
Rani, K. (2018). Is There an Export- or Import-Led Growth in BRICS Countries? An Empirical Investigation. Jindal Journal of Business Research, 7, 13-23.
https://doi.org/10.1177/2278682118761748
[20]
Ricardo, D. (1817). On the Principles of Political Economy and Taxation (3rd ed.). London. https://socialsciences.mcmaster.ca/econ/ugcm/3ll3/ricardo/Principles.pdf
[21]
Sentsho, J. (2012). Export Revenues as Determinants of Economic Growth: Evidence from Botswana. Economic Society of South Africa. http://www.essa.org.za
[22]
Smith, A. (1776). The Wealth of Nations. New York: Random House of Canada Limited, Toronto: Random House, Inc.
[23]
Srinivasan, T. N. (1999). Trade Orientation, Trade Liberalization, and Economic Growth. In G. R. Saxonhouse, & T. N. Srinivasan (Eds.), Development, Duality, and the International Economic Regime. Ann Arbor, MN: The University of Michigan Press.
[24]
Taban, S. A. (2008). An Empirical Examination of the Export-Led Growth Hypothesis in Turkey. Journal of Yasar University, 3, 1535-1551.
[25]
Tabari, N. A. (2010). A Study of the Effects of Non-Oil Exports on Iranian Economic Growth. International Conference on EURASIAN Economies, 302-308.
[26]
Uddin, H. A. (2009). Export, Imports, Remittance and Growth in Bangladesh: An Empirical Analysis. Trade and Development Review, 79-92.
[27]
Ullah, Z. F. (2009). Cointegration and Causality between Exports and Economic Growth in Pakistan. European Journal of Social Sciences, 10, 23-35.
[28]
World Bank Group (2018). From Growth to Development: Priorities for Sustainably Reducing Poverty and Achieving Middle-Income Status by 2030. Monrovia: World Bank Group.
http://documents.worldbank.org/curated/en/585371528125859387/pdf/LBR-SCD-draft-10-06012018.pdf
[29]
World Population Review (2020a). Liberia Population 2020 (Live).
https://worldpopulationreview.com/countries/liberia-population
[30]
World Population Review (2020b). Poorest Countries in the World Ranking.
https://worldpopulationreview.com/country-rankings/poorest-countries-in-the-world
