Economic development and trade outcomes in East African countries: Prospects and constraints

Abstract

This study employed a panel data analysis from selected East African countries, with the use of fixed and random effects model which was tested using Hausman specification test. The results from the study showed that; trade agreement and foreign direct investment (FDI) have a significant positive effect on East African economy, while trade openness exerts a negative effect as a result of low productivity. Therefore, the study recommended that the government of East African countries should embrace and develop policies in promoting the continental trade agreement and economic integration, in order to raise the level of productivity within the region and the sub-region for sustainable economic development.