Abstract
The aim of this paper is to try to measure the impact of the trade openness on the economic growth in Algeria using the annual data for the period (1980¬-2015). In this intent, we considered three openness measures: the ratio of exports to GDP, the ratio of imports to GDP and the ratio of all the exports and the imports to GDP since that, the GDP per capita in real terms is used as an indicator of the economic growth. This analysis is based by the Fully Modified Ordinary Least Squares method said (FMOLS); The empirical results revealed the existence of long-term relationship between the real GDP per capita and Trade liberalization, and show that the trade openness has a significantly positive impact on the economic growth in Algeria, this result highlights that trade openness promote economic growth in Algeria.
Highlights
The integration of countries into the world economy is often regarded as an important determinant of differences in income and growth across countries
It is evident that all time series are compatible with the hypothesis that stationarity characterizes the variables in this study
This paper investigates the relationship between openness, and economic growth in Algeria
Summary
The integration of countries into the world economy is often regarded as an important determinant of differences in income and growth across countries. Openness to trade introduces the possibility of an international product cycle, as the production of certain products previously produced by advanced economies migrates to less-developed countries. This process of “product migration” is accompanied by an increase in the trade volumes of less- developed countries and a diffusion of more advanced production technologies, which expands the technology available to less-advanced countries. It has been argued that some forms of protectionism, e.g., infant industry protection to develop certain industries or sectors or a strategic trade policy in key sectors, can be beneficial for economic development. It has been argued that some forms of protectionism, e.g., infant industry protection to develop certain industries or sectors or a strategic trade policy in key sectors, can be beneficial for economic development. [30, 42]
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