Bruckner, MarkusLederman, Daniel2014-08-292014-08-292012-03https://hdl.handle.net/10986/19874In the 1990s the mainstream consensus was that trade causes growth. Subsequent research shed doubt on the consensus view, as evidence suggested that the identification of the effect of trade on growth was problematic in the existing literature. This paper contributes to this debate by focusing on growth in Sub-Saharan Africa. It estimates the effect of openness to international trade on economic growth with panel data. Employing instrumental variables techniques that correct for endogeneity bias, the empirical evidence suggests that within-country variations in trade openness cause economic growth: a 1 percentage point increase in the ratio of trade over gross domestic product is associated with a short-run increase in growth of approximately 0.5 percent per year; the long-run effect is larger, reaching about 0.8 percent after ten years. These results are robust to controlling for country and time fixed effects as well as political institutions.en-USCC BY 3.0 IGOABSOLUTE VALUEADVERSE EFFECTSAGRICULTURAL SECTORAGRICULTUREARMED CONFLICTBENEFITS OF TRADEBILATERAL TRADEBILATERAL TRADE DATABUSINESS CYCLECAPITAL ACCUMULATIONCOMMODITY PRICECOMPETITIVENESSCOUNTRY CHARACTERISTICSCOUNTRY LEVELCOUNTRY REGRESSIONSCOUNTRY SPECIFICCUMULATIVE EFFECTCURRENT ACCOUNTDEPENDENT VARIABLEDESCRIPTIVE STATISTICSDEVELOPED COUNTRIESDEVELOPING COUNTRIESDEVELOPING REGIONSDEVELOPING WORLDDEVELOPMENT ECONOMICSDEVELOPMENT GOALSDEVELOPMENT INDICATORSDEVELOPMENT POLICYDEVELOPMENT REPORTDISTRIBUTION OF INCOMEDYNAMIC PANELECONOMETRIC ANALYSESECONOMETRIC ESTIMATESECONOMETRIC MODELSECONOMETRICSECONOMIC CONDITIONSECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC LITERATUREEMPIRICAL EVIDENCEERROR TERMESTIMATED COEFFICIENTEXPORT VOLUMEEXPORTSFINANCIAL SECTORFIXED EFFECTSFOREIGN MARKETSGDPGDP PER CAPITAGRAVITY MODELGROSS DOMESTIC PRODUCTGROWTH EFFECTGROWTH MODELGROWTH MODELSGROWTH RATEGROWTH RATESGROWTH REGRESSIONSIMPORT TARIFFSIMPORT VOLUMEIMPORTSINCOME DISTRIBUTIONINDEX GROWTHINTERNATIONAL BANKINTERNATIONAL ECONOMICSINTERNATIONAL TRADELONG-RUN GROWTHMACROECONOMICSMARGINAL EFFECTMEASURE OF TRADEMONETARY POLICYNATIONAL ACCOUNTSNEGATIVE EFFECTPANEL REGRESSIONSPER CAPITA GROWTHPOLICY DEBATEPOLICY INTERVENTIONSPOLICY REFORMSPOLICY RESEARCHPOLITICAL ECONOMYPOLITICAL SYSTEMSPOVERTY REDUCTIONREAL GDPREGIONAL TRADEREGIONAL TRADE INTEGRATIONRENT SEEKINGSERIAL CORRELATIONSIGNIFICANT EFFECTTAX REVENUESTOTAL FACTOR PRODUCTIVITYTRADE FLOWSTRADE LIBERALIZATIONTRADE OPENNESSTRADE POLICIESTRADE POLICYTRADE VOLUMESVOLUME OF TRADEWAGE INEQUALITY10.1596/1813-9450-6007