TITLE:
The Study on the Impact of Liberia’s Exports and Imports on Its Economic Growth
AUTHORS:
Faliku S. Dukuly, Kun Huang
KEYWORDS:
Liberia, Economic Growth, Exports, Export-Led Growth, Imports, International Trade
JOURNAL NAME:
Open Journal of Business and Management,
Vol.8 No.6,
November
23,
2020
ABSTRACT: Liberia is labeled at the peak considered as one of the poorest countries
in the world. Therefore, Liberia needs to take an effective trade policy
approach to promote both domestic and international trade facilitation if it is
to achieve sustainable and further economic growth. International trade is the
engine for economic development, and it has become one of many economic
discussions not only among West African States and member countries but globally that Liberia is no
exception to since exports-trade leads to GDP growth and economic development.
As a result of frequent trade deficits and Liberia’s economic reliance on
extractive commodities for trade in agricultural goods, the study sought to
analyze the role of exports-trade on economic growth and development with
regard to Liberia. The study was conducted using secondary data generated from the World Bank Development Indicators (WBDI)
for the period 2000-2019. The study employed a time series regression
model of the Ordinary Least Squares (OLS) and technique by Stock and Wilson
(1988) to analyze Liberia’s trade performance using macroeconomic
indicators/variables that have an effect on economic growth, such as, Exports, Foreign
Direct Investment (FDI), Population growth, Imports, Gross Fixed Capital
Formation, (GFCF) and Gross Domestic Product (GDP) as the key indicators of
analysis. The regression results obtained from the study on the Ordinary Least
Squares tests show a linear association and a straight-line relationship among
the variables, namely: export, foreign direct
investment, population and economic growth in Liberia. With the estimated results, import has a
negative impact and relationship with Liberia’s GDP growth. The effect of
export was positive and highly statistically significant.