Trade openness and economic development

This research was motivated by the divisive debate among scholars about whether trade openness can propel economic development in the Democratic Republic of Congo (DRC). Its objectives were to estimate the effect of trade openness on economic development, and to analyze how the internal and external mechanisms of the economy affect the state of this relationship. Econometric analysis was employed using the Vector Error Correction Model (VECM). The results showed that the effect of trade openness on economic development is significantly negative at over 90%. This shows that the competition theory failed to propel economic development in the study area and period through trade openness as the authors claimed. Therefore, we have provided an explanation of the internal mechanisms that affect the state of this relationship.