# Testing the Impact of Exports, Imports, and Trade Openness on Economic Growth in Namibia: Assessment Using the ARDL Cointegration Method

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## Abstract

**:**

## 1. Introduction

## 2. Empirical Literature Review

## 3. Data and Methodology

#### 3.1. Model Specification

- GDPPC = per capita real GDP (a proxy for economic growth).
- IMPORT = imports of goods and services as a percentage of GDP.
- EXPORT = exports of goods and services as a percentage of GDP.
- GNE = general government final consumption expenditure as a percentage of GDP.
- CAPITAL = gross fixed capital formation.
- TROPEN = trade openness = $\left(\frac{\mathrm{Exports}+\mathrm{Imports}}{\mathrm{GDP}}\times 100\right)$.
- DEFLATOR = measure of inflation.

#### 3.2. ARDL Model Specification

- ${\mathsf{\rho}}_{1}-{\mathsf{\rho}}_{5}$ and ${\mathsf{\sigma}}_{1}-{\mathsf{\sigma}}_{5}$ denote the long-run multipliers.
- ${\mathsf{\rho}}_{0}$ and ${\mathsf{\sigma}}_{0}$ are the intercepts.
- ${\mathsf{\rho}}_{11}-{\mathsf{\rho}}_{15}$ and ${\mathsf{\sigma}}_{11}-{\mathsf{\sigma}}_{15}$ are short-run dynamic coefficients.
- ${\mathsf{\mu}}_{1\mathrm{t}}$ and ${\mathsf{\mu}}_{2\mathrm{t}}$ are the error terms.

#### 3.3. ARDL Bounds Test Decision Rules

## 4. Results

#### 4.1. The Unit Root Tests

#### 4.2. The Bounds Test Results

_{0}: ${\mathsf{\rho}}_{1}={\mathsf{\rho}}_{2}={\mathsf{\rho}}_{3}={\mathsf{\rho}}_{4}={\mathsf{\rho}}_{5}=0$; and H

_{0}: ${\mathsf{\sigma}}_{1}={\mathsf{\sigma}}_{2}={\mathsf{\sigma}}_{3}={\mathsf{\sigma}}_{4}={\mathsf{\sigma}}_{5}=0$. The first null hypothesis is related to Equation (3), whereas the second is related to Equation (4). Table 2 shows the results of the bounds test for cointegration.

#### 4.3. Estimation of the Long-Run Relationships

#### 4.4. ECM Results and Analysis

#### 4.5. Diagnostic Tests

## 5. Conclusions

## Author Contributions

## Funding

## Informed Consent Statement

## Data Availability Statement

## Conflicts of Interest

## References

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Variable | PP | ADF | Decision | ||
---|---|---|---|---|---|

Levels | 1st Difference | Levels | 1st Difference | I(d) | |

GDPPC | −1.067856 | −2.895649 * | −0.637260 | −2.895649 * | I(1) |

CAPITAL | −0.740966 | −4.38133 *** | −1.003957 | −4.4612 *** | I(1) |

GNE | −2.666170 | −4.81353 *** | −2.525702 | −4.8663 *** | I(1) |

EXPORT | −0.867513 | −4.96835 *** | −0.867513 | −4.8946 *** | I(1) |

IMPORT | −0.466587 | −5.99031 *** | −2.566135 | −6.0111 *** | I(1) |

TROPEN | −0.433793 | −4.94327 *** | −0.333829 | −4.7301 *** | I(1) |

DEFLATOR | −6.107 *** | −21.938 *** | I(0) |

Model 1 | Model 2 | |||

F-statistic | 8.6670 | 3.9423 | ||

Asymptotic | I0 bound | I1 bound | I0 bound | I1 bound |

10% | 2.260 | 3.350 | 2.080 | 3.000 |

5% | 2.620 | 3.790 | 2.390 | 3.380 |

1% | 3.410 | 4.680 | 3.060 | 4.150 |

Model 1 | Model 2 | ||||
---|---|---|---|---|---|

Variable | Coefficient | Std. Error | Variable | Coefficient | Std. Error |

CAPITAL | 0.285048 | 0.118851 | CAPITAL | 0.394322 | 0.016138 |

GNE | 0.453270 | 0.035119 | GNE | 0.421142 | 0.159830 |

EXPORT | 0.749757 | 0.145929 | TOPEN | 0.437013 | 0.148780 |

IMPORT | −0.270894 | 0.092317 | DEFLATOR | −0.090932 | 0.147759 |

C | 7.867679 | 0.869250 | C | 11.20406 | 0.644007 |

Dependent Variable: ΔLNGDPC | ||||
---|---|---|---|---|

Variable | Coefficient | Std. Error | t-Statistic | Prob. |

$\Delta {\mathrm{GDPPC}}_{\mathrm{t}-1}$ | 0.718561 | 0.109843 | 6.541717 | 0.0000 |

$\Delta \mathrm{CAPITAL}$ | 0.023534 | 0.007184 | 3.275855 | 0.0021 |

$\Delta {\mathrm{CAPITAL}}_{\mathrm{t}-1}$ | 0.023481 | 0.007666 | 3.063024 | 0.0038 |

$\Delta \mathrm{GNE}$ | 0.098649 | 0.040458 | 2.438287 | 0.0190 |

$\Delta {\mathrm{GNE}}_{\mathrm{t}-1}$ | 0.064403 | 0.041016 | 1.570206 | 0.1237 |

$\Delta \mathrm{EXPORT}$ | 0.193348 | 0.052318 | 3.695652 | 0.0006 |

$\Delta {\mathrm{EXPORT}}_{\mathrm{t}-1}$ | 0.170057 | 0.049054 | 3.466700 | 0.0012 |

$\Delta \mathrm{IMPORT}$ | −0.107918 | 0.039872 | −2.706626 | 0.0097 |

$\Delta {\mathrm{IMPORT}}_{\mathrm{t}-1}$ | −0.089017 | 0.041593 | −2.140167 | 0.0381 |

${\mathrm{ECT}}_{\mathrm{t}-1}$ | −0.092793 | 0.018807 | −4.933906 | 0.0000 |

R-squared | 0.779004 | |||

Adjusted R-squared | 0.707051 | |||

${\mathsf{\chi}}^{2}$ Serial | 0.345567 (0.7686) | |||

${\mathsf{\chi}}^{2}$ ARCH | 0.359706 (0.5526) | |||

${\mathsf{\chi}}^{2}$ Normal | 0.364725 (0.8333) | |||

${\mathsf{\chi}}^{2}$ RESET | 0.609020 (0.4443) |

Dependent Variable: ΔLNGDPC | ||||
---|---|---|---|---|

Variable | Coefficient | Std. Error | t-Statistic | Prob. |

$\Delta {\mathrm{GDPPC}}_{\mathrm{t}-1}$ | 0.753654 | 0.109279 | 6.896593 | 0.0000 |

$\Delta \mathrm{CAPITAL}$ | 0.292955 | 0.100745 | 2.907893 | 0.0056 |

$\Delta {\mathrm{CAPITAL}}_{\mathrm{t}-1}$ | 0.363138 | 0.132785 | 2.734774 | 0.0089 |

$\Delta \mathrm{GNE}$ | 0.025557 | 0.009183 | 2.783107 | 0.0078 |

$\Delta {\mathrm{GNE}}_{\mathrm{t}-1}$ | 0.017339 | 0.007577 | 2.288324 | 0.0269 |

$\Delta \mathrm{TOPEN}$ | 0.041234 | 0.018446 | 2.235314 | 0.0304 |

$\Delta {\mathrm{TOPEN}}_{\mathrm{t}-1}$ | 0.067191 | 0.033958 | 1.978636 | 0.0540 |

$\Delta \mathrm{DEFLATOR}$ | −0.134512 | 0.035039 | −3.838947 | 0.0004 |

$\Delta {\mathrm{DEFLATOR}}_{\mathrm{t}-1}$ | −0.020503 | 0.009262 | −2.213630 | 0.0320 |

$\Delta {\mathrm{DEFLATOR}}_{\mathrm{t}-2}$ | −0.086566 | 0.041356 | −2.093175 | 0.0420 |

${\mathrm{ECT}}_{\mathrm{T}-1}$ | −0.163381 | 0.025851 | −6.319987 | 0.0000 |

R-squared | 0.774172 | |||

Adjusted R-squared | 0.744286 | |||

${\mathsf{\chi}}^{2}$ Serial | 0.249953 (0.7808) | |||

${\mathsf{\chi}}^{2}$ ARCH | 0.209295 (0.6501) | |||

${\mathsf{\chi}}^{2}$ Normal | 0.062166 (0.9694) | |||

${\mathsf{\chi}}^{2}$ RESET | 0.297409 (0.7686) |

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**MDPI and ACS Style**

Sunde, T.; Tafirenyika, B.; Adeyanju, A.
Testing the Impact of Exports, Imports, and Trade Openness on Economic Growth in Namibia: Assessment Using the ARDL Cointegration Method. *Economies* **2023**, *11*, 86.
https://doi.org/10.3390/economies11030086

**AMA Style**

Sunde T, Tafirenyika B, Adeyanju A.
Testing the Impact of Exports, Imports, and Trade Openness on Economic Growth in Namibia: Assessment Using the ARDL Cointegration Method. *Economies*. 2023; 11(3):86.
https://doi.org/10.3390/economies11030086

**Chicago/Turabian Style**

Sunde, Tafirenyika, Blessing Tafirenyika, and Anthony Adeyanju.
2023. "Testing the Impact of Exports, Imports, and Trade Openness on Economic Growth in Namibia: Assessment Using the ARDL Cointegration Method" *Economies* 11, no. 3: 86.
https://doi.org/10.3390/economies11030086