Journal of Enterprise and Development (JED)
Vol. 6 No. 2 (2024): Journal of Enterprise and Development (JED)

Trade openness, poverty, and sustainable development: Testing for causality using Dumitrescu-Hurlin approach

Adewale Musliudeen Balogun (Olabisi Onabanjo University, Nigeria)
Oluwaseyi Adedayo Adelowokan (Olabisi Onabanjo University, Nigeria)
Felix Odunayo Ajayi (Olabisi Onabanjo University, Nigeria)
Jimoh Sina Ogede (Olabisi Onabanjo University, Nigeria)



Article Info

Publish Date
01 Feb 2024

Abstract

Purpose — This research paper explores the causal links between trade openness, poverty, and sustainable development, shedding light on the potential impact of trade policies on poverty reduction and sustainable development in the Economic Community of West African States (ECOWAS) region.Method — We utilize the Dumitrescu-Hurlin (DH) panel causality test, a robust econometric approach capable of discerning the direction and magnitude of causal relationships among variables. We employ a comprehensive dataset spanning from 1986 to 2020, covering ECOWAS countries, to conduct a rigorous empirical analysis.Result — The empirical findings from the DH causality analysis reveal a unidirectional relationship between trade openness, human capital investment, and both sustainable development and poverty. Additionally, bidirectional causality relationships are observed between human capital investment and poverty. The results also highlight the absence of a consistent and uniform pattern of Granger causality between poverty and sustainability across individual West African economies. This heterogeneity underscores the need for customized policy approaches based on empirical evidence derived from country-specific causality analyses, rather than adopting one-size-fits-all solutions.Novelty  — This research stands out by exploring the causal connections among trade openness, poverty, and sustainable development within the Economic Community of West African States (ECOWAS) region. The adoption of the Dumitrescu-Hurlin (DH) panel causality test enhances the empirical analysis, offering a comprehensive understanding of both the direction and magnitude of these relationships.

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Journal Info

Abbrev

jed

Publisher

Subject

Economics, Econometrics & Finance

Description

Journal of Enterprise and Development (JED) (p-ISSN: 2715-3118/ e-ISSN: 2685-8258) is an international peer-reviewed journal that publishes high-quality research in economics, finance, management, entrepreneurship, and tourism, with a particular focus on enterprise development, innovation, public ...