Trade openness and economic growth in Libya

Abstract

The main aim of this study was to examine the relationship between trade openness and economic growth, both in terms of its traditional concept proxied by real GDP, and sustainable concept proxied by carbon productivity CP, in the Libyan economy during the period of 1962-2017. The correlation analysis has showed a positive relationship between trade openness and GDP. However, a negative relationship between trade openness and CP has been captured. Bounds test results have supported the existence of a long run equilibrium relationship among the research variables. UECM results have indicated a negative impact of trade openness on economic growth, both GDP and CP. In addition, long run coefficients have illustrated a positive impact of trade openness on GDP, but a negative impact on CP.