External Opening and Economic Growth in the West African Economic and Monetary Union: Analysis in Panel Data

Abstract

In continuation of reflections on the factors of growth in the West African Economic and Monetary Union (WAEMU), with all the resources it contains, we must consider the implications of the external opening in achieving the growth objectives of the union. Speaking of the external opening in the context of this study is to put forward the exports and imports carried out between the country and the world. Another dimension of the openness used in this study is the foreign direct investment received by these countries. The aim of this paper is to try to provide some answers to the following question: What is the impact of openness on economic growth of the WAEMU’s countries? To answer this question the dynamic panel methodology in the period 1994-2008 is used. The results show that the WAEMU’s countries are primarily countries extroverts. This is demonstrated in terms of openness, the rate of penetration and the export effort. Through the co-integration test, we notice the long-run relationship between GDP and the different dimensions of the opening used in the study. In addition, opening has a positive effect on economic growth in WAEMU. Moreover, foreign direct investment has an impact significant on growth in these countries.