Title: Nexus Of Capital Goods Import and Economic Growth: Evidence from Panel ARDL Model for WAMZ
Abstract: Low and unstable economic growth characterized WAMZ countries between 1970 and 2012. Although some of the countries improved in in the last decade, the average growth rate in the sub-region remained unimpressive till 2012. Capital goods import in the sub-region increased from $1.24 billion in 1970 to $49.77 billion in 2012. The contradiction presented by increased capital but unstable growth necessitated this study. The panel ARDL that allow for rich dynamics in a way that the dependent variable adjusts to changes in the independent variables was used. The Mean Group (MG), Pooled Mean Group (PMG), and Dynamic Fixed-Effect (DFE) were estimated. The Hausman test informed the choice of PMG. The results indicated that capital import has positive significant impact on economic growth in both short-run and long- run, although the magnitude of coefficient is higher in the long-run. Crude products have negative insignificant impact on economic growth in the short-run, although it was insignificant in the long-run. The impact of domestic investment on economic growth is negative but insignificant although it was significant in the long-run. Same in the long-run, budget deficit, political instability and inflation have negative significant impact on economic growth.
Publication Year: 2014
Publication Date: 2014-01-01
Language: en
Type: article
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Cited By Count: 3
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