Is Trade Liberalization One of the Determinants of Poverty in Upper Middle-Income Countries?

Authors

  • Kunofiwa Tsaurai University of South Africa

Keywords:

Trade Liberalization, Poverty, Upper Middle Income Countries, Panel Data

Abstract

This study examined whether trade openness is one of the determinants of poverty in upper middle-income countries using panel data (1991-2020) analysis methods such as fixed effects, pooled ordinary least squares (OLS) and fully modified ordinary least squares (FMOLS). Models 2 and 3 consistently produced results which show that trade openness reduced poverty in upper middle-income countries. The complementarity variables (1) trade openness and financial development and (2) trade openness and human capital development had a poverty reduction influence in upper middle-income countries. The study therefore urges the authorities in selected upper middle-income countries to craft and implement policies which further opens trade with other countries and which also enhances both human capital and financial development to alleviate poverty. A future study on the threshold levels of trade openness, human capital and financial development that significantly reduces poverty will add value to the existing literature.

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Published

2024-04-30

How to Cite

Tsaurai, K. (2024). Is Trade Liberalization One of the Determinants of Poverty in Upper Middle-Income Countries?. Acta Universitatis Danubius. Œconomica, 20(2), 16–37. Retrieved from https://dj.univ-danubius.ro/index.php/AUDOE/article/view/2695

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Section

Business Administration and Business Economics

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