Information Systems Management and Innovation, Vol 2, No 1 (2018)

Trade Liberalization, Human Capital and Economic Growth in countries from MENA region: empirical analysis of panel data

OTHMANE FAHIM, SALAHEDDINE RHANAMI

Abstract


This study is a panel data analysis of the relation between trade openness, human capital and economic growth of seventeen countries in the Middle East and North Africa (MENA) in the period 1990-2014. Our study is based on two econometric models: random and fixed effects models. The random effects model measures the trade openness impact on human capital. The fixed effects model measures the trade openness impact on economic growth. Here, we also introduce the human capital variable in order to gauge its impact on economic growth. The main results of the study are manifold. First, trade openness impacts human capital negatively but insignificantly. Second, trade openness impacts economic growth positively but insignificantly. Third, human capital impacts economic growth negatively and significantly. Finally, the countries of the MENA region must invest in human capital in order to benefit from trade openness.