An Empirical Analysis of the Effects of Trade Openness on Economic Growth in Tanzania

Abstract

This empirical study aims to investigate the relationship between trade openness and Tanzania's economic growth. Specifically, the study estimates the relationships between the dependent variable, which is economic growth, and the independent variable which is trade openness. Econometrics analysis and estimate techniques were employed in the study's quantitative approach and empirical processes to meet its objectives. To determine if the variables were regularly distributed, the normality test was run. The skewness and kurtosis tests for normalcy were run for each variable. The test showed that the GDP and trade openness were normally distributed since the Prob>chi2 values of each variable were larger than the 0.05 significance. The outcome indicates a long-term association based on the model's estimation using the ADL test which shows a short-run relationship between trade openness and economic growth.