Author(s)

Rasha M. Elakkad, Asmaa M. Hussein

Department of Economics, Faculty of Commerce and Business Administration, Helwan University, Helwan, Egypt.

Several economic and noneconomic factors can affect the economic growth of any developing country. The study in hand is concerned with investigating the impact of real imports on economic growth in Egypt together with determining the main economic variables that affect the demand of imports. Initially, the study presented theoretical and empirical literature for these economic relations displaying the main theories and previous studies concerning the effect of imports and open-door policies on economic growth in some developing countries. Then, stepping to the applied analysis, the empirical examination is presented through two models using an Autoregressive Distributed Lag (ARDL) bounds estimation technique applied on annual observations in Egypt since launching the open door policy in 1974 till 2021. The first model investigates the impact of real imports together with other explanatory and control variables on the GDP annual growth rate. Whereas, the second model examines the significance of GDP, purchasing power parity (PPP) (used as a proxy for relative prices—RP), average official exchange rate (ER) and foreign reserves (FR) on real imports of goods and services in Egypt. The results of the ARDL bounds tests for both models confirm the existence of a cointegrated long-run relationship between the dependent and the independent variables. After confirming the long-run relationship, the short-run coefficients have been estimated by ARDL error correction model (ECM) to find that in Egypt, it takes a period of less than two years to adjust any shock in economic growth.

Economic Growth, Real Imports, Imports’ Demand, ARDL Model, ECM

Elakkad, R. and Hussein, A. (2023) The Impact of Imports on Economic Growth in Egypt. Open Journal of Social Sciences, 11, 209-227. doi: 10.4236/jss.2023.119015.