Social Sciences and Humanities Open (Jan 2020)
Infrastructure, trade openness and economic transformation in Common Market for Eastern and Southern Africa member countries
Abstract
This study investigates the effect of economic infrastructure and trade openness on the evolution of manufacturing and service sectors output using panel data for 14 selected COMESA member countries from 1993 to 2016. The Pooled Mean Group, Mean Group, and Dynamic Fixed Effects techniques were used to estimate the long-run effect. The results show strong evidence of a significant long-run dampening effect of trade openness on the relationship between economic infrastructure and manufacturing output on the one hand and between economic infrastructure and service output on the other hand. To achieve economic transformation, COMESA member countries need to introduce more projects to improve and increase access to energy infrastructure, especially electricity, and telecommunication related infrastructure. The presence of adequate infrastructure can make it possible for the countries in the bloc to benefit more from trade openness.
