Dynamic Effects of African Economic Integration: Evidence from Panel Data
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This paper uses panel data to estimate the impact of AMU, COMESA, ECCAS, ECOWAS and SADC regional economic integrations on the level and rate of growth of economic activity in Africa. The impacts of each integration scheme on the level of investment and the rate of growth of real GDP per capita are estimated. The estimated results show that the impacts of COMESA, ECOWAS, and SADC on the level of investment are positive and significant while that of AMU is negative and significant. Only ECCAS has a negative and significant influence on the rate of growth of real GDP per capita. The impacts of AMU, COMESA, ECOWAS and SADC on rate of growth of real GDP per capita are insignificant. With respect to the marginal impacts, COMESA, ECOWAS and SADC are found to reduce the marginal impact of trade openness on investment, COMESA is also found to reduce the marginal impact of trade openness on economic growth while ECCAS is found to increase the marginal impact of trade openness on growth.