The impact of international trade on economic growth in Somalia

Hassan isse jimale and Aylin ERDOĞDU *

Republic of Türkiye, Graduate school of Istanbul Arel university Türkiye.
 
Review
International Journal of Science and Research Archive, 2024, 12(01), 862–881.
Article DOI: 10.30574/ijsra.2024.12.1.0874
Publication history: 
Received on 09 April 2024; revised on 18 May 2024; accepted on 21 May 2024
 
Abstract: 
The main objective of this study was to examine the impact of international trade on economic growth in Somalia. This objective was accomplished with the support of four distinct objectives. To investigate the impact of exports on economic growth in Somalia. To examine how imports impact economic growth in Somalia. To discover how the trade openness phenomenon effects economic growth in Somalia. To establish a solid foundation for public policy founded on an innovative international trade approach that considerably boosts the country's economic growth over the long term.
In Somalia, international trade has become increasingly important, driven by imports surpassing exports, which underscores the primary objective of this study. Therefore, the study employed the least squares (OLS) method to analyze the determinants of international trade in Somalia from 1960 to 2022. Our analysis predominantly centered on explanatory variables such as exports, imports, and trade openness.
According to the study's findings, exports and imports have a positive relationship and have a statistically significant impact on economic growth. This means that a one-unit increase in exports and imports leads to an increase in economic growth in Somalia. The exports and imports have revealed a number of characteristics that are positive for economic growth.
Moreover, the study's findings indicate an adverse relationship between trade openness and economic growth. Trade openness has a probability that it is statistically significant with a negative coefficient within the parameter estimation model. A negative coefficient suggests that the dependent variable tends to decrease with an increase in the independent variable.
In conclusion, the study's findings contributed to the policy recommendations, which should be taken into account by decision-makers.
 
Keywords: 
Trade openness; Exports; Imports; Economic growth; Ordinary Least Squares (OLS) Somalia
 
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