DOI: 10.5176/2251-3701_2.2.72
Authors: Nirodha De Silva, Benaissa Chidmi and Jeff Johnson
Abstract:
This study attempted to show the relationship between trade liberalization and economic growth in Sri Lanka over the period of 1960-2010. This paper empirically estimated the causality relationship between trade openness and economic growth by employing co-integration and Granger –causality tests. The analysis supports the long run relationship between trade openness and economic growth. This study also concluded investments and Free Trade Agreements are significant and positively related to the economic growth and showed that both factors are feasible in sustaining economic growth in Sri Lanka.
Keywords: Trade Liberalization, Trade Openness, Economic Growth, Investment, Free Trade Agreements, Co-integration, Causality, Error Correction Model, Sri Lanka
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