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The Study on the Impact of Liberia’s Exports and Imports on Its Economic Growth

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Document pages: 22 pages

Abstract: Liberia is labeled at the peak considered as one of the poorest countriesin the world. Therefore, Liberia needs to take an effective trade policyapproach to promote both domestic and international trade facilitation if it isto achieve sustainable and further economic growth. International trade is theengine for economic development, and it has become one of many economicdiscussions not only among West African States and member countries but globally that Liberia is noexception to since exports-trade leads to GDP growth and economic development.As a result of frequent trade deficits and Liberia’s economic reliance onextractive commodities for trade in agricultural goods, the study sought toanalyze the role of exports-trade on economic growth and development withregard to Liberia. The study was conducted using secondary data generated from the World Bank Development Indicators (WBDI)for the period 2000-2019. The study employed a time series regressionmodel of the Ordinary Least Squares (OLS) and technique by Stock and Wilson(1988) to analyze Liberia’s trade performance using macroeconomicindicators variables that have an effect on economic growth, such as, Exports, ForeignDirect Investment (FDI), Population growth, Imports, Gross Fixed CapitalFormation, (GFCF) and Gross Domestic Product (GDP) as the key indicators ofanalysis. The regression results obtained from the study on the Ordinary LeastSquares tests show a linear association and a straight-line relationship amongthe variables, namely: export, foreign directinvestment, population and economic growth in Liberia. With the estimated results, import has anegative impact and relationship with Liberia’s GDP growth. The effect ofexport was positive and highly statistically significant.

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