The impact of trade openness on growth: The case of Kenya

Jacob W. Musila, Zelealem Yiheyis

Research output: Contribution to journalJournal Articlepeer-review

114 Citations (Scopus)

Abstract

This paper investigates the effects of trade openness on the level of investment and the rate of economic growth in Kenya using annual time series data. The aggregate trade openness and trade-policy induced openness are evaluated. Controlling for a number of factors, aggregate trade openness is found to have positively affected the level of investment and the rate of economic growth, although the effect on the latter is statistically insignificant. On the other hand, we find trade-policy induced openness to have negatively and significantly affected investment and the rate of economic growth. Granger Causality tests suggest that a change in trade openness influences the long-term rate of economic growth through the interaction with physical capital growth in the case of Kenya.

Original languageEnglish
Pages (from-to)342-354
Number of pages13
JournalJournal of Policy Modeling
Volume37
Issue number2
DOIs
Publication statusPublished - 1 Mar. 2015

Keywords

  • Economic growth
  • Kenya
  • Trade openness

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