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Future Business Journal

Table 2 Determinants of trade openness in LICs

From: On the determinants of trade openness in low- and lower–middle-income countries in Africa: how important is economic growth?

 

1

2

3

4

5

Lagged trade openness

0.4925***

(0.0442)

[0.000]

0.4729***

(0.0547)

[0.000]

0.4702***

(0.0546)

[0.000]

0.4772***

(0.0532)

[0.000]

0.4133***

(0.0709)

[0.000]

Real GDP per capita

0.0360***

(0.010)

[0.000]

0.0346***

(0.0115)

[0.003]

0.0465***

(0.0128)

[0.000]

0.0493***

(0.0126)

[0.000]

0.1092***

(0.0263)

[0.000]

Private credit

− 0.2270

(0.1992)

[0.256]

–

− 0.7745*

(0.4147)

[0.062]

− 0.6169*

(0.3592)

[0.086]

− 0.7906**

(0.3223)

[0.014]

Domestic credit

–

0.1644***

(0.0512)

[0.001]

0.3233**

(0.1389)

[0.020]

0.2862**

(0.1296)

[0.027]

0.2102**

(0.0960)

[0.029]

Inflation

0.0011***

(0.0001)

[0.000]

0.0011***

(0.0001)

[0.000]

0.0010***

(0.0002)

[0.000]

0.0010***

(0.00019)

[0.000]

0.00131***

(0.00021)

[0.000]

Gross fixed capital formation

0.8876***

(0.2190)

[0.000]

0.7749***

(0.2480)

[0.002]

1.2686***

(0.4069)

[0.002]

1.0331***

(0.2504)

[0.000]

0.8770**

(0.3822)

[0.022]

Population

− 0.0789

(3.8352)

[0.984]

− 0.1633

(3.124)

[0.958]

3.1714

(3.7525)

[0.398]

–

–

Domestic savings

− 0.7186***

(0.0212)

[0.000]

− 0.6295***

(0.0757)

[0.000]

− 0.7363***

(0.1333)

[0.000]

− 0.7162***

(0.1265)

[0.000]

− 0.7580***

(0.1305)

[0.000]

Real GDP per capita squared

–

–

–

–

− 0.00004***

(0.00001)

[0.001]

Threshold

    

$1365a

Diagnostics

 Country and time effects

Yes

Yes

Yes

Yes

Yes

 Wald \(\chi^{2}\)

 [p-value]

5990.12

[0.000]

4227.13

[0.000]

2153.86

[0.0000]

2153.86

[0.000]

521.91

[0.000]

 Sargan test

 [p-value]

11.353

[0.243]

13.453

[0.264]

16.422

[0.201]

18.623

[0.231]

14.453

[0.621]

 AR(2)

 [p-value]

− 2.754

[0.322]

− 3.243

[0.234]

− 3.123

[0.266]

− 2.627

[0.311]

− 3.001

[0.261]

 No. of groups

22

22

22

22

22

  1. a\(\begin{aligned} & \frac{{\partial \left( {{\text{Trade openness}} } \right)}}{{\partial \left( {{\text{Real GDP per capita}}_{it} } \right)}} = \beta_{1} + 2\beta_{2} {\text{Real GDP per capita}}_{it} = 0 \Rightarrow {\text{Real GDP per capita }}_{it} = - \frac{{\beta_{1} }}{{2\beta_{2} }} \\ \Rightarrow - \frac{0.1092 }{{2\left( { - 0.00004} \right)}} = \$ 1 3 6 5\\ \end{aligned}\)
  2. *, **, and *** denote 10%, 5%, and 1% significance levels, respectively
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