- Title
- Trade openness, economic growth, income inequality and poverty nexus in SADC countries: 1980-2019
- Creator
- Gonese, Dorcas https://orcid.org/0000-0003-0774-024X
- Subject
- Economic development
- Subject
- Income distribution
- Date
- 2022-01
- Type
- Doctoral theses
- Type
- text
- Identifier
- http://hdl.handle.net/10353/23370
- Identifier
- vital:57618
- Description
- Trade openness (TO) has been identified as a critical component for sustainable economic growth, income inequality reduction, and poverty reduction in the 2030 Agenda as per the Sustainable Development Goals (SDGs), and the Southern African Development Community (SADC) regional indicative strategic development plan (RISDP). Despite the opening up to the global world, developing countries such as the SADC continue to face exclusive and unstable economic growth, massive income disparity, and poverty. Considering the previous empirical work, many controversies are related to methodologies and measurement issues. The study attempted to examine the impact of trade openness on economic growth of the SADC countries as well as its effect on income inequality and poverty reduction from 1980 to 2019. The study builds on existing studies in the region that have mainly analysed this kind of relationship, assuming that it is only TO and economic growth (EGR) that matters. The study sought to address three analytical objectives. The first objective focused on examining the effects of trade openness on economic growth in the SADC countries. In addressing this objective, the Pooled Mean Group (PMG) was utilised, given the nature of the relationship between the variables of interest. The empirical results revealed that all measures of trade openness (real trade openness, economic globalisation, exports and imports of goods and services) used in the study have a positive effect on economic growth in SADC countries. This implies that the foreign factors account for a share of SADC's economic growth. The PMG indicates that the mediating variables of all measures of trade openness with human capital development have a positive effect on economic growth. This implies that the beneficial impact of the said measures of trade openness, are more effective when investment in human capital increases. The second objective focused on analysing trade openness's direct and indirect impact on income inequality using the PMG model again. The empirical results indicate that trade openness via exports has a negative effect on income inequality. In contrast, real trade openness and imports positively affect income inequality. This implies that the exports of goods and services in SADC are drivers of income inequality reduction while real trade openness and imports worsen it. Therefore, the SADC countries must be wary of real trade openness and import policies addressing income inequality. As for the interaction effects, the empirical results indicate that greater openness via real trade openness, economic globalisation, exports and imports reduce income inequality when economic growth increases and when the financial sector is more developed. The final analytical objective focused on analysing the effects of TO on poverty in the SADC region. The PMG model was utilised for trade openness-non-income poverty (NPOV) relationship. However, because there is a scarcity of income-poverty (IPOV) data, the time dimensions for the income poverty-trade openness model are smaller than the cross sections. Therefore, the current study employed the system generalised method of moments (SGMM) estimation technique which is a more effective and efficient estimation technique for controlling for endogeneity when the time dimension is smaller than the cross sections. The findings indicate that real trade openness has a positive effect on NPOV, whereas economic globalisation, exports, and imports negatively affect NPOV. This implies that real trade openness increases poverty reduction while economic globalisation, exports and imports exacerbate non-income poverty in SADC countries. On testing whether trade openness- NPOV relationship changes with economic growth, income inequality, human capital development, financial development and institutional quality, the complementary variable with EGR is positive and significant for real trade openness and exports, implying that real trade openness and exports reduce NPOV when economic growth increases. The SGMM indicates that only economic globalisation and imports have negative impact on income poverty in SADC countries. This implies that economic globalisation and imports are determinants of income poverty reduction in the SADC countries. The SADC governments and policymakers should be mindful about what ways they should globalise, what goods they export or imports to minimise income poverty.
- Description
- Thesis (PhD) -- Faculty of Management and Commerce, 2022
- Format
- computer
- Format
- online resource
- Format
- application/pdf
- Format
- 1 online resource (xviii, 328 pages)
- Format
- Publisher
- University of Fort Hare
- Publisher
- Faculty of Management and Commerce
- Language
- English
- Rights
- rights holder
- Rights
- All Rights Reserved
- Rights
- Open Access
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UFH Department of Economics
| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details Download | SOURCE1 | Gonese_200909489_Economics 1.pdf | 4 MB | Adobe Acrobat PDF | View Details Download |