Author(s)

Mirana Annicet Rasoanomenjanahary, Liang Cao, Yanle Xi

Zhongnan University of Economics and Law, Wuhan, China.

The purpose of this research is to determine the impact of trade openness on economic growth; nevertheless, the study of the trade openness and economic growth nexus in Madagascar is still ongoing. As a result, the link between trade openness and economic growth has been intensively researched, with conflicting and inconclusive results. This study uses the Vector Error Correlation Model techniques for the period 1993 to 2020. Specifically, the empirical estimated results are sound evidence that there exists a long-run cointegration among the variables. Our empirical findings further depict that trade openness has a negative effect on economic growth in Madagascar. Moreover, this study demonstrates a positive and significant complementary relationship between inflation, FDI net inflow, and Labor force participation in strengthening economic growth. The study concluded with the recommendation that policymakers should develop and execute trade laws that are aimed at regulating various sources of import and export in the country.

Madagascar, Trade Openness, GDP, VECM

Rasoanomenjanahary, M. , Cao, L. and Xi, Y. (2022) The Impact of Trade Openness on Economic Growth: Empirical Evidence from Madagascar. Modern Economy, 13, 629-650. doi: 10.4236/me.2022.135034.