Import-economic growth nexus in selected African countries: An application of the Toda-Yamamoto Granger non-causality test

Abstract

Abstract We determine the nexus between imports and economic growth for a sample of 26 African countries for the period 1990-2015 within the neoclassical production function framework. We mainly contribute to literature by overcoming the weak theoretical modelling framework and possible model specification bias in most extant studies. Using the Toda-Yamamoto Granger non-causality test, the empirical results indicate that there is absence of causality between imports and economic growth in more than half of the countries in the sample, thus suggesting that neutrality hypothesis is predominant among the countries. We provide ample evidence that causality is absent from imports to economic growth. However, our results should be treated with caution because the absence of causality from imports to economic growth should not imply that imports do not play a role in the growth process of an economy.