The Effects of Regional Integration on Economic Growth in ECOWAS Countries

Authors

  • Orji Alexander C. Department of Economics, Nnamdi Azikiwe University
  • Okafor Samuel O. Department of Economics, Nnamdi Azikiwe University
  • Obi Kenneth C. Department of Economics, Nnamdi Azikiwe University
  • Ukeje Chiemezie D. Department of Economics, Nnamdi Azikiwe University

Keywords:

ECOWAS, Economic growth, Regional integration

Abstract

This study examined the effects of regional integration on economic growth of ECOWAS member countries from 2010 to 2020. Unlike previous studies that mainly utilised variables like terms of trade and export to capture regional integration, this study employed the regional integration index computed from 2010 to 2020 and made available by the African Regional Integration Index (ARII) in five dimensions to capture the effects of regional integration on economic growth of ECOWAS members. The objective of the study was to examine the effects of trade and financial integrations on economic growth using trade integration index and financial integration index as proxies for trade integration and financial integration respectively. To overcome the potential problems such as cross-sectional dependence among countries, serial correlation of the error term, and more importantly, the problem of identification and endogenous regressors that characterise some panel data regression methods like the pool mean group (PMG), fixed effect (FE) and random effect (RE), this study employed an instrumental variable (IV) regression based on the dynamic panel data (DPD) method, within the framework of the generalised method of moments (GMM-SYS).The results show that aggregate regional integration in five dimensions (composite regional integration index), though has a positive relationship with economic growth, does not exert a significant impact on economic growth of ECOWAS members. Interestingly, trade integration and financial integration, both have a significant positive impact on economic growth of ECOWAS members, meaning that ECOWAS members are better-off with integration in trade and finance. We, therefore, concluded that regional integration of ECOWAS members is more beneficial when more emphasis is placed on trade and financial dimensions. This finding has serious policy implications for regional integration and economic growth of ECOWAS member countries.

Published

2022-03-31

How to Cite

Orji, A., Okafor, S., Obi, K., & Ukeje, C. (2022). The Effects of Regional Integration on Economic Growth in ECOWAS Countries. Journal of International Economic Relations and Development Economics, 1(2), 1–20. Retrieved from https://theinterscholar.org/journals/index.php/jierade/article/view/153

Issue

Section

Articles