The generative powerof air freight in the trade openness - Economic growth nexus in African countries

Chun Ping Chang, Yung Hsiang Ying

Research output: Contribution to journalArticle

8 Citations (Scopus)

Abstract

Foreign trade matters considerably more than ever in today's integrated economies, and the wealth of benefits afforded by air transport is one of the cornerstones of international trade. Therefore, to shed light on the precise role of air cargo, seen as an important motor of growth, this paper provides an empirical model to examine the relationships among trade openness, air freight volume and GDP per capita using panel cointegration techniques for a sample of Economic Commission for Africa (ECA) countries during the 1970-2002 period. The analysis substantiates that there are cointegrated relationships among the three variables and that they are bound together in a long-run equilibrium. Furthermore, evidence from fully modified Ordinary Least Squares panel estimations also indicates that positive trade and air freight shocks contribute to real GDP per capita. In addition, improvements in air cargo services are accompanied by an increase in trade openness in ECA countries and vice versa. These results underscore the important role of air freight and demonstrate that it should not have been overlooked in earlier studies. Finally, the empirical findings have important policy implications for our sample countries.

Original languageEnglish
Pages (from-to)493-512
Number of pages20
JournalSouth African Journal of Economics
Volume76
Issue number3
DOIs
Publication statusPublished - 2008 Nov 18

Fingerprint

Economic growth
Trade openness
Freight
Air
African countries
Africa
Air cargo
Economics
GDP per capita
Policy implications
International trade
Integrated
Wealth
Panel estimation
Panel cointegration
Foreign trade
Real GDP
Empirical model
Ordinary least squares
Long-run equilibrium

Keywords

  • Air cargo
  • FMOLS
  • Growth
  • Openness
  • Panel cointegration

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

The generative powerof air freight in the trade openness - Economic growth nexus in African countries. / Chang, Chun Ping; Ying, Yung Hsiang.

In: South African Journal of Economics, Vol. 76, No. 3, 18.11.2008, p. 493-512.

Research output: Contribution to journalArticle

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