Trade Facilitation and Economic Growth in Developing Countries: Using A Static and Dynamic Framework

Abstract

Analysing the literature, it is found that empirical evidences on the link between trade facilitation and economic growth for developing countries is very scarce. The present study investigated whether trade facilitation has contributed to the economic growth of a sample of 23 developing countries over the period 2007-2014. Results from the analysis highlight the importance of trade facilitation as a crucial determinant of development. Moreover, even trade levels have demonstrated to have an important role to play in boosting growth levels. Private investment is also seen to be an important driver of growth and the importance of education, are also acknowledged by the results. The GMM estimates confirmed these results and further indicated the presence of dynamism in growth modeling. Moreover, the granger causality test shows that there is a uni directional causality flowing from trade facilitation to economic growth.