The effects of foreign trade on economic growth in COMESA countries

The study evaluates the relationship between foreign trade and economic growth and tests the null hypothesis of granger non-causality between the two variables using data for COMESA regional economic bloc. Annual panel data from 1980 to 2014 was analyzed using Quantile Regression method. The study also employed ARDL model to estimate the long run relationship between foreign trade and economic growth. The estimation results indicate that foreign trade is largely insignificant and only statistically significant with positive effects on economic growth up to the 10th percentile for COMESA member states. On the other hand, economic growth is also largely insignificant with significant but negative effect on foreign trade between 65th and 85th percentile. Further, ARDL model shows that in the long run, foreign trade has a negative effect on growth while growth has a positive influence on trade.