Impacts of economic growth on an export driven economy: A case study of Mauritania

This thesis investigates the relationship between Mauritania's export performance and important macroeconomic factors between 1986 and 2023. It specifically uses yearly time series data from the World Bank's World Development Indicators to examine how exports are affected by real gross domestic product (GDP), foreign direct investment (FDI), and the exchange rate. In order to capture both short-run dynamics and long-run equilibrium relationships, the study uses the Autoregressive Distributed Lag (ARDL) bounds testing approach in conjunction with unit root and cointegration tests, as well as diagnostic and stability analyses. The empirical results highlight the role of economic growth as a driver of Mauritania's trade performance by showing that GDP has a significant positive impact on exports over the long and short terms. Although its short-term impact manifests slowly, reflecting gradual adjustments to competitiveness, exchange rate depreciation is found to have a positive long-term impact on exports. FDI has a positive but small effect on exports, indicating that its influence is still restricted because it is concentrated in extractive industries rather than diverse, export-focused sectors. Nearly half of deviations are corrected annually, according to the error correction model, which validates a stable long-term equilibrium. The study concludes that Mauritania's export performance is influenced by growth dynamics, investment inflows, and exchange rate movements, but it is limited by an overreliance on a small number of commodities. Policy recommendations emphasise the importance of export diversification, improved trade facilitation measures, targeted FDI in productive sectors, and exchange rate stability. These measures are critical for improving Mauritania's competitiveness and encouraging sustainable, export-led development.