The impact of trade liberalization on the performance of Tanzania’s export sector – a time series analysis from 1980 to 2019
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Date
2023
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Publisher
Oeconomia
Abstract
Aim: This article aims to enhance understanding of the impact of trade liberalization on Tanzania’s export performance. As many studies conducted, both in developing and developed countries, have yielded mixed results and the relationship varies across different nations, it is difficult to provide a definitive answer to the question of whether trade liberalization affects Tanzania’s export sector without first conducting an empirical analysis. Methods: This study employs a quantitative research methodology because it allows for a larger
sample size, greater objectivity, and accuracy. Due to the nature of the study and the data used, a statistical
study design was chosen. Macroeconomic data spanning 1980 to 2019 was obtained from the World Bank
and the Tanzania Bureau of Statistics to analyze the effects of trade liberalization on export performance
using vector error correction and autoregressive distributed lag models. Results: The results reveal a significant positive correlation between trade liberalization and subsequent export performance, as well as the
interdependencies between trade liberalization and foreign direct investment (FDI) strategies. There is a reciprocal relationship between trade liberalization and exchange rates, implying the significance of competent
exchange rate management in enhancing export competitiveness. Conclusions: The study concludes that
trade liberalization, FDI, and export performance have a long-term positive correlation. This implies that
a carefully executed trade liberalization policy is crucial not only for the expansion of the export industry
sector and the influx of capital but also for the transformation and development of the nation growth.
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Keywords
trade liberalization -Tanzania, Tanzania’s export sector, time series analysis, international trade, trade liberalization, Vector Error Correction Model (VECM), Autoregressive Distributed Lag (ARDL), international economics, economic growth
Citation
APA