Open AccessThe impact of trade liberalisation on mining sector total factor productivity: Evidence from developing countries
Author(s) -
Ireen Choga,
Shylet Mufandaedza
Publication year - 2022
Publication title -
journal of governance and regulation
Language(s) - English
Resource type - Journals
eISSN - 2306-6784
pISSN - 2220-9352
DOI - 10.22495/jgrv11i1siart2
Subject(s) - openness to experience , total factor productivity , panel data , factor endowment , productivity , economics , liberalization , developing country , development economics , international trade , international economics , business , economic growth , market economy , psychology , social psychology , econometrics
While the paradox of plenty is given much weight on raging debates on resource endowment and growth path of the Southern Africa Development Community (SADC) countries. The study seeks to establish the effect of trade liberalisation on mining total factor productivity. The study employed panel data of selected seven countries from the SADC for the period 1990–2017. The countries in the sample include Botswana, South Africa, Tanzania, Namibia, Zimbabwe, the Democratic Republic of the Congo (DRC), and Zambia, and were chosen based on data availability. Hicks-Moorsteen productivity index was applied to generate the total factor productivity change. A panel auto regressive distributed lag model (PARDL) and pooled mean group (PMG) are the estimation techniques used. The inquiry is crucial to SADC because mining production is a source of foreign exchange that directly contributes to economic growth. However, with open economies of SADC study expects the easy flow and diffusion of technology to aid productivity in the mining sector (Griffith, Redding, & Van Reenen, 2014). Results indicate a positive and statistically significant long-run relationship between trade openness and total factor productivity change in the mining sector. The study recommends progressive trade openness in the mining sector, human capital development, research and development to augment technology transfer.