Title: Do trade openness and domestic credit to the private sector stimulate economic growth in Ghana? A bound test approach

Authors: Frank Gyimah Sackey; Richard Kofi Asravor; Isaac Ankrah

Addresses: Department of Economics, Ghana Communication Technology University, PMB 100, Tesano, Accra, Ghana ' Department of Economics, Ghana Communication Technology University, PMB 100, Tesano, Accra, Ghana ' Department of Economics, Ghana Communication Technology University, PMB 100, Tesano, Accra, Ghana

Abstract: The study examined the impact of trade openness and domestic credit to the private sector (DCP) on the growth of the Ghanaian economy. The study therefore examined the extent to which trade openness and domestic credit to the private sector impact GDP growth with other covariates such as inflation, exchange rate and foreign direct investments both in the short and the long run. Data was gleaned from the World Bank database spanning from 1970 to 2021. The study adopted the bound test approach using the autoregressive distributed lag estimation. Our results showed that trade openness has a positive relationship with economic growth both in the short and the long run while no such significant relationship was observed for domestic credit to the private sector. Again, we observed a positive relationship between inflation and GDP growth at least, in the short run. The study recommends policies that will enhance the increase in both internal and external trade as well as those that will deal with challenges of the private sector's access to credit to achieve the desired growth.

Keywords: trade openness; domestic credit; autoregressive distributed lags; ARDLs; bound test Ghana.

DOI: 10.1504/IJBCG.2023.135781

International Journal of Business Competition and Growth, 2023 Vol.8 No.3, pp.164 - 184

Received: 14 Oct 2022
Accepted: 24 Oct 2022
Published online: 05 Jan 2024 *