Published on December 2017 | Economics

Growth Effect of Export Promotion on Non-oil Output in Sub-Saharan Africa (1970–2014)

The study examines the growth effect of export promotion strategies on non-oil output in the sub-Saharan African (SSA) countries between 1970 and 2014. The study employed panel data and three estimation techniques (pooled ordinary least square [OLS], fixed effect, and dynamic generalized moment method [GMM]) to analyze the data. In addition, export promotion policies (EPPs) such as commercial bank credit to private sector, foreign direct investment (FDI) to non-oil sector, real effective exchange rate, and government expenditure were used. Results show that all export promotion policy instruments used have a significant effect on non-oil output in SSA. Also, while bank credit to private sector have positive and significant effect, FDI, government expenditure, and exchange rate will crowd out growth effect of export promotion. The study concluded that favorable EPPs will stimulate non-oil output growth.