Effect of International Trade on Economic Growth in ECOWAS Sub-Region

Abstract

This paper econometrically analyzes the effects of international trade on economic growth in the ECOWAS sub-region using a panel data set of fourteen ECOWAS countries covering 1995 to 2017. The Pooled Mean Group (PMG) estimator was employed in data analysis since time dimension was greater than cross-section and the order of integration of the variables were mixed. The study found that international trade (extra-ECOWAS trade) positively and significantly affected economic growth both in the long run and in the short run in ECOWAS sub-region. Intra-ECOWAS trade adversely affected economic growth of the sub-region in the long run, while its short-run effect was also negative, but not significant. In light of the empirical evidences, this study recommends the enhancement of international trade; integration of the countries in the ECOWAS sub-region with the global market to promote the growth of the sub-region.