Abstract
This study explored the causal relationship between exports and economic growth in Tanzania. It analyzed time series data for the period of 1980 to 2015. Economic growth is measured in terms of growth per cent while exports are measured in percentage change of goods and services sold abroad. Econometrics analysis was employed in the due course. Such procedures as testing for the presence of unit root, co-integration and causality were done. Furthermore, the Johansen co-integration and Granger causality tests were employed to examine the long-run relationship among variables. The results of co-integration indicate the existence of one co-integrating equation. The causality test results exhibited causality which runs from economic growth to exports. The results conclude that, in the long run, there is a relationship between exports and economic growth in Tanzania. This study recommends the Government to make efforts to improve exports and eventually, in the long-run, rejuvenating the economy.
Highlights
It is argued that the role of international trade in influencing the economic growth of countries around the World has always been an issue of interest for academicians, economists and politicians (Dutt, Ghosh, & Austin 2015)
This paper identifies the relationship between exports trade and economic growth (GDP GROWTH) in Tanzania
A number of econometric methodologies which offer various techniques were applied in investigating the causality relationship between Export trade growth and economic growth
Summary
It is argued that the role of international trade in influencing the economic growth of countries around the World has always been an issue of interest for academicians, economists and politicians (Dutt, Ghosh, & Austin 2015). Economists link export trade with different levels of economic growth among countries. It is well established that, trade openness and integration into global markets have become important elements to successful strategies with sustained economic growth which are associated with export growth (Dollar & Kraay, 2001). Though the export sector shows to have been playing an important role in Tanzanian economic development, there is no much information which provides literature on the direct relationship between export and economic growth. From this perspective, this study is undertaken to objectively examine the relationship which typically exists between exports and economic growth in Tanzania. This study is orderly structured into main five sections: section one presents both introduction and the background to the study, section two presents synthesized information on literature review; section three discusses data and methodology employed, section four presents data presentation, analysis and discussion of the findings and section five presents conclusion and recommendations which the study findings suggest
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