Working Paper Series: Special Edition of 2016 to 2018 Interns

skills via the adaptation of superior technology and innovative processes. In fact, the authors went on to note trade openness could lead to increased competitiveness when more advance ways of production through open trade are embraced. Meanwhile, Awokuse (2008) postulated trade openness may serve as a conduit for technology trasnfer and imports can impact on productivity growth through its effect on domestic innovation via import competition. Adhikary (2011) argued that trade openness is likely to influence the flows of international capital as it relates to the risk- return relationship. The author further argued that international investors would not want to commit to long-term investment if a country imposes tariffs and non-tariff barriers to trade; therefore, a more liberated regime will invite more international investments and thus spur growth. In addition, Tahir and Azid (2015) suggested that open economies are better positioned to import investment and intermediate goods than would a closed economy; thus, open economies are better position to benefit from trade openness. Moreover, Dollar (1992) and Das (2002) also came to similar conclusions, citing that foreign capital and importation of intermediate goods can embody superior technology that can enhance productivity growth and by extension economic growth in an economy. Mahadevan and Suardi (2010) explored the trade-growth nexus in the empirical framework of the Vector Autoregressive Model in the case of Singapore. The result showed that trade (exports and imports) has had a positive impact on GDP in the focus country. The research further identified the role of imports as providing intermediate inputs and foreign technology. Interestingly enough, the import experience of Singapore is also something that the ECCU nations have been privy to and can use to increase their global competitiveness as well. Studies conducted by Agbestsiafa (2010) on the UEMOA 17 countries have produced some mixed results in regards to the direction of causality. Employing the Johansen conintegration test, it was found that indeed there is a long- run relationship between trade openness and economic growth. However, in a few of the counties a bidirectional causal relationship was found while in other countries only a unidirectional causal relationship was found going from trade openness to GDP. In light of such findings, it is quite natural that the author suggested expansions in trade activity might result in increased economic growth in these countries. While many studies mentioned above may have found a positive link between trade openness and growth, there are authors that oppose this claim based on their

17 The UEMOA countries refer to the Union Economique et Monetaire Ouest-Aafricaine

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