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ABSTRACT
The study investigates the conditioning effect of institutions in the relationship between trade openness and poverty reduction in Sub-Saharan African economies. Employing generalized method of moments, it was revealed that institutions influence the relationship between trade openness and poverty reduction in SSA. Thus, to reduce poverty in the region, SSA economies must first start by opening their economies to international trade. This could be achieved by reducing import and export taxes, focusing more on exporting value-added products and providing relevant training and information for importers and exporters. However, such attempts will be more fruitful in the presence of sound institutions.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Data availability statement
The data on the Human Development Index employed as a measure for poverty reduction is openly available at https://hdr.undp.org/en/content/human-development-index-hdi. Also, data on the institutional structures that support the study’s findings are publicly available from the Worldwide Governance Indicators (WGI) at https://databank.worldbank.org/source/worldwide-governance-indicators. Again, data on trade openness, FDI, GDP per capita, inflation, and unemployment that support the findings of this study are openly available from the World Development Indicators (WDI) at https://databank.worldbank.org/source/world-development-indicators. Data on the Financial Development Index is available openly at https://data.imf.org/?sk=F8032E80-B36C-43B1-AC26-493C5B1CD33B. Finally, data on trade freedom is openly available at https://www.heritage.org/index.