INDUSTRIAL POLICY, TRADE OPENNESS AND ECONOMIC GROWTH NEXUS: AN EXPLORATORY REVIEW

Abstract

Trade openness is commonly viewed as one of the engines of economic growth. Hence, it is not surprising that several countries have taken measures to ensure that their industrial and trade policies permit some form of trade openness. This study analyses the relationship between trade openness and economic growth, highlighting some of the controversies on the effects of trade openness. From the existing literature, it is evident that the effects of trade openness are not always positive and significant, hence a closer investigation of the relationship between trade openness and economic growth is vital. Based on the findings, this paper recommends that policy makes must first address the enabling factors to ensure significant positive benefits from trade openness. This implies that countries must prioritise the aligning of their trade and industrial policies with trade facilitation, financial development, industrialisation, technological advancement and infrastructural development.