A Study on Export Expansion as a Determinant of Economic Progress in The Gambia

The Gambia export growth is important because of its effects on national & internal trade and economic stability. Moreover, the rate of economic growth in The Gambia and the distribution of income and wealth are closely related to export growth. Growth of the economy is directly related to exports. At national level, the export activity provided a large amount of income for the economy. On the other hand, the instability in exports can seriously affect the process of economic growth and development. This paper examines the causal relationship between The Gambia exports and economic growth (GDP) using the Error Correction Model (ECM) for the time series data period 1980-2013. Econometric models were estimated to test for time series properties: unit root (ADF) and Co-Integration (Johansen’s procedure). With these (time series) data, a short and long run relationship is established between GDP and exports using an Error Correction Model (ECM). According to the empirical results, the R-squared is found to be 63.49%. This statistically implies that The Gambia’s economic growth (GDP) can be explained by its total export at a rate of 63.49%, showing that total export growth is a good determinant of economic growth. The main conclusion that can be drawn from the ECM is the negative relationship between GDP and exports from 2003 to 2010. The reasons for this negative relationship were domestic and international, social and economic changes, which includes the fiscal deficit trends. Thus, it is a signal that more efforts are needed for the revitalization of the export industry policy target

کلیدواژه ها:

Co-Integration ، Economic Growth (GDP) ، Error Correction Model (ECM) ، Exports ، Revitalization ، The Gambia ، Unit Root (ADF)