EXPORT DIVERSIFICATION, TRADE OPENNESS AND ECONOMIC GROWTH: EMPIRICAL EVIDENCE

Abstract

The objective of this paper is to examine the relationship between export diversification, trade openness and economic growth in Algeria. To do this, we estimate the export diversification index, (measured by the Herfindhal-Hirschman index) on a set of explanatory variables. This relationship is measured using a VECM model over the period 1990-2019. The estimation results indicate that trade openness is a key determinant positively affecting export diversification. In addition, results show that export diversification affects positively, but not significantly, Algerian economic growth.