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


  • Kunofiwa Tsaurai University of South Africa


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


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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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



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