Staff View: Institutional quality and trade openness-economic growth nexus in the Arab Maghreb Union

Institutional quality and trade openness-economic growth nexus in the Arab Maghreb Union

The continued failures to become high-income countries of the Arab Maghreb Union (AMU) countries have led to a renewed focus on the fundamental determinants of economic growth and the economic impact of the quality of institutional factors in these countries. This study examines the direct effects o...

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Main Authors:	Boubechtoula, Younes, Ariffin, Muhammad Irwan, Duasa, Jarita
Format:	Article
Language:	English
Published:	Asian Scholars Network 2024
Subjects:	HC94 By region or country HD72 Economic growth, development, planning HD75.6 Economic development. Environmental aspects HF1021 Commercial geography. Economic geography JF1338 Public administration
Online Access:	http://irep.iium.edu.my/116166/1/Institutional%20Quality%20and%20Trade%20Openness-Economic%20Growth%20Nexus%20in%20the%20Arab%20Maghreb%20Union.pdf http://irep.iium.edu.my/116166/ https://myjms.mohe.gov.my/index.php/ijbtm/article/view/28349
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spelling	my.iium.irep.1161662024-11-29T08:32:16Z http://irep.iium.edu.my/116166/ Institutional quality and trade openness-economic growth nexus in the Arab Maghreb Union Boubechtoula, Younes Ariffin, Muhammad Irwan Duasa, Jarita HC94 By region or country HD72 Economic growth, development, planning HD75.6 Economic development. Environmental aspects HF1021 Commercial geography. Economic geography JF1338 Public administration The continued failures to become high-income countries of the Arab Maghreb Union (AMU) countries have led to a renewed focus on the fundamental determinants of economic growth and the economic impact of the quality of institutional factors in these countries. This study examines the direct effects of trade openness and institutional quality and the moderating effect of institutional quality on trade openness-economic growth nexus of AMU countries from 1996 to 2022. The institutional quality is proxied by the overall factors’ score of the Worldwide Governance Indicators (WGI). The study employs panel data estimation models where the Hausman test is used for model specification between the two techniques: the fixed effect model (FEM) and the random effect model (REM). The study’s findings reveal that trade openness has a significant positive impact on AMU’s economic growth. In contrast, institutional quality does not directly affect economic growth, implying that institutions in AMU countries are underdeveloped. More importantly, the marginal effect of trade openness is positively and significantly associated with growth for all levels of institutional quality, implying that institutional quality matters for trade openness-growth nexus in AMU economies. The results imply that inflation and labor force significantly and positively affect economic growth. According to the results, the human capital index has not impacted the economic growth of the sampled countries as expected. Instead, the study finds that the human capital index has adversely affected economic growth. Finally, the relationship between trade openness and GDP growth is highly dependent on the institutional quality of AMU nations. Thus, to foster economic growth in AMU countries, the findings suggest a focused strategy to improve institutional quality. Asian Scholars Network 2024 Article PeerReviewed application/pdf en http://irep.iium.edu.my/116166/1/Institutional%20Quality%20and%20Trade%20Openness-Economic%20Growth%20Nexus%20in%20the%20Arab%20Maghreb%20Union.pdf Boubechtoula, Younes and Ariffin, Muhammad Irwan and Duasa, Jarita (2024) Institutional quality and trade openness-economic growth nexus in the Arab Maghreb Union. International Journal of Business and Technology Management, 6 (S4). pp. 155-175. E-ISSN 2682-7646 https://myjms.mohe.gov.my/index.php/ijbtm/article/view/28349
institution	Universiti Islam Antarabangsa Malaysia
building	IIUM Library
collection	Institutional Repository
continent	Asia
country	Malaysia
content_provider	International Islamic University Malaysia
content_source	IIUM Repository (IREP)
url_provider	http://irep.iium.edu.my/
language	English
topic	HC94 By region or country HD72 Economic growth, development, planning HD75.6 Economic development. Environmental aspects HF1021 Commercial geography. Economic geography JF1338 Public administration
spellingShingle	HC94 By region or country HD72 Economic growth, development, planning HD75.6 Economic development. Environmental aspects HF1021 Commercial geography. Economic geography JF1338 Public administration Boubechtoula, Younes Ariffin, Muhammad Irwan Duasa, Jarita Institutional quality and trade openness-economic growth nexus in the Arab Maghreb Union
description	The continued failures to become high-income countries of the Arab Maghreb Union (AMU) countries have led to a renewed focus on the fundamental determinants of economic growth and the economic impact of the quality of institutional factors in these countries. This study examines the direct effects of trade openness and institutional quality and the moderating effect of institutional quality on trade openness-economic growth nexus of AMU countries from 1996 to 2022. The institutional quality is proxied by the overall factors’ score of the Worldwide Governance Indicators (WGI). The study employs panel data estimation models where the Hausman test is used for model specification between the two techniques: the fixed effect model (FEM) and the random effect model (REM). The study’s findings reveal that trade openness has a significant positive impact on AMU’s economic growth. In contrast, institutional quality does not directly affect economic growth, implying that institutions in AMU countries are underdeveloped. More importantly, the marginal effect of trade openness is positively and significantly associated with growth for all levels of institutional quality, implying that institutional quality matters for trade openness-growth nexus in AMU economies. The results imply that inflation and labor force significantly and positively affect economic growth. According to the results, the human capital index has not impacted the economic growth of the sampled countries as expected. Instead, the study finds that the human capital index has adversely affected economic growth. Finally, the relationship between trade openness and GDP growth is highly dependent on the institutional quality of AMU nations. Thus, to foster economic growth in AMU countries, the findings suggest a focused strategy to improve institutional quality.
format	Article
author	Boubechtoula, Younes Ariffin, Muhammad Irwan Duasa, Jarita
author_facet	Boubechtoula, Younes Ariffin, Muhammad Irwan Duasa, Jarita
author_sort	Boubechtoula, Younes
title	Institutional quality and trade openness-economic growth nexus in the Arab Maghreb Union
title_short	Institutional quality and trade openness-economic growth nexus in the Arab Maghreb Union
title_full	Institutional quality and trade openness-economic growth nexus in the Arab Maghreb Union
title_fullStr	Institutional quality and trade openness-economic growth nexus in the Arab Maghreb Union
title_full_unstemmed	Institutional quality and trade openness-economic growth nexus in the Arab Maghreb Union
title_sort	institutional quality and trade openness-economic growth nexus in the arab maghreb union
publisher	Asian Scholars Network
publishDate	2024
url	http://irep.iium.edu.my/116166/1/Institutional%20Quality%20and%20Trade%20Openness-Economic%20Growth%20Nexus%20in%20the%20Arab%20Maghreb%20Union.pdf http://irep.iium.edu.my/116166/ https://myjms.mohe.gov.my/index.php/ijbtm/article/view/28349
_version_	1817841079471308800
score	13.235796

Institutional quality and trade openness-economic growth nexus in the Arab Maghreb Union

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