Trade Openness and Economic Growth: A Lesson from United Arab Emirates

Hatem Hatef  Abdulkadhim

doi:10.25098/4.2.24

Authors

Hatem Hatef Abdulkadhim Head of Accounting Department, Faculty of Business and Financial Sciences, Cihan University- Sulaimania, Slemani, Iraq

DOI:

https://doi.org/10.25098/4.2.24

Keywords:

Trade openness, economic growth, UAE, , ARDL, FMOLS, DOLS, CCR

Abstract

This study examines the long run as well as the short run impacts of trade openness on economic growth of the UAE between the years 1980 to 2014. For this purpose, this study applied ARDL approach. To check the robustness of the initial long run relationships the study adopted three long run tests, namely, the dynamic OLS (DOLS), Fully Modified OLS (FMOLS), and the canonical cointegration regression (CCR). The estimation shows that the trade openness positively contributes in the economic growth of UAE in both long run and short run. Results of FMOLS, DOLS, and CCR suggest that the results are robust. Our results in general go in line with wider literature on the determinants of economic growth. Findings show that electricity consumption and degree of trade openness prove to be the main drivers to economic growth. From the findings it is concluded that the government should aim to adopt export promotion strategy to enhance the economic growth in the country.

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