ANALYSIS OF THE IMPACT OF TRADE OPENNESS ON ECONOMIC GROWTH: THE CASE OF MOROCCO

Abstract

The relationship between openness to international trade and economic growth has been a subject of perennial controversy. This has paved the way for various theoretical and empirical investigations which has yielded inconclusive results, particularly in the case of developing countries. As a good case in point, the Moroccan economy has been subjected to a thorough analysis in order to determine and evaluate the impact of trade openness on economic growth covering the period from 1980 to 2019. To this end, the methodology adopted consists of a complementary approach of statistical and econometric tests using the ARDL bounds test of cointegration and the Toda-Yamamoto causality test. The results have shown that Morocco's openness to international trade positively impacts economic growth in the short term. Yet, it produces adverse effects in the long term, especially with the presence of bidirectional causal relationship between the two variables– i.e economic growth and international trade.