2072-64142411-140610.17059/ekon.reg.2024-3-18Effects of a Customs Union on Economic Growth: Empirical Evidence from Southern African Customs Union (SACU)Влияние членства в таможенном союзе на экономический рост стран: эмпирические данные Южно-Африканского таможенного союзаhttps://orcid.org/0000-0002-7846-2374LeeHan-SolЛи Хансол li-kh@rudn.ruChernikov Sergey U. Черников Сергей Юрьевич chernikov-syu@rudn.ruhttps://orcid.org/0000-0002-1285-1473Moseykin Yury N. Мосейкин Юрий Никитович moseykin-yun@rudn.ruBarrie Gibrilla Барри Джибрилла gibrillabarrie717@gmail.comRUDN UniversityРоссийский университет дружбы народов203884898Copyright © 2024 Han-Sol Lee, Sergey U. Chernikov, Yury N. Moseykin, Gibrilla BarrieCopyright © 2024 Хансол Ли, Сергей Юрьевич Черников, Юрий Никитович Мосейкин, Джибрилла Барри2024Han-Sol Lee, Sergey U. Chernikov, Yury N. Moseykin, Gibrilla BarrieХансол Ли, Сергей Юрьевич Черников, Юрий Никитович Мосейкин, Джибрилла БарриCC BY 4.0https://www.economyofregions.org/ojs/index.php/er/article/view/527https://www.economyofregions.org/ojs/index.php/er/article/download/527/341

This study analyses the effects of the Southern African Customs Union (SACU) on the economic growth of its member states based on unbalanced panel datasets. This research was inspired by the ongoing discussions about the development of “free-trade agreements” and the growing anxiety about the US dollar’s stability as a world currency. The latter has recently led to the announcement of the Brazil-Argentina currency union to make bilateral trade easier. As the SACU countries are practically using the South African Rand as a single currency, a growing interest in evaluating the SACU internal trade validity for being the foundation of similar integrative action has started to manifest. The regression results of pooled ordinary least squares (OLS), fixed effects (FE), and random effects (RE) models demonstrate that the economic growth effects of intra-trade (exports, imports) of SACU do not exist. This indicates that further economic integration may not provide positive effects for SACU. However, the most crucial factor to drive the economic growth of SACU turned out to be domestic investment. Attracting foreign direct investment (FDI) also highly contributes to the economic growth of SACU. It is natural and advisable for the member states of SACU to continue the enhancement of investment-conducive environments for domestic and foreign companies. In addition, the long-term fuelling of economic growth with government debt, government spending, and investments points to possible discrepancies in the economic structure of the union, may be connected to internal demand issues. In this sense, it would be reasonable to research the potential of expanding SACU to the countries of the Southern African Development Community (SADC).

В статье исследуется влияние Южно-Африканского таможенного союза (ЮАТС) на экономический рост государств-членов на основе анализа несбалансированных панельных данных. В настоящее время продолжаются дискуссии о разработке соглашений о свободной торговле, а также растет обеспокоенность по поводу стабильности доллара США как мировой валюты. Последнее привело к привело к созданию валютного союза между Бразилией и Аргентиной для облегчения двусторонней торговли. Поскольку страны ЮАТС фактически используют южноафриканский рэнд в качестве единой валюты, для координации аналогичных интеграционных действий необходимо оценить внутреннюю торговлю в рамках союза. Для построения регрессий были использованы методы объединенных наименьших квадратов, модель с фиксированными эффектами и модель со случайными эффектами. Их анализ показал отсутствие влияния внутренней торговли (экспорта, импорта) на экономический рост в ЮАТС. Это означает, что дальнейшая экономическая интеграция может не принести желаемых положительных результатов. Наиболее важным фактором экономического роста в Южно-Аафриканском таможенном союзе оказались внутренние инвестиции; значительную роль также играет привлечение прямых иностранных инвестиций. Следовательно, для государств — членов ЮАТС целесообразной является политика улучшения инвестиционных условий для отечественных и иностранных компаний. Использование таких рычагов стимулирования экономического роста, как государственный долг, государственные расходы и инвестиции указывает на возможные структурные диспропорции с экономике союза, что может быть связано с проблемами внутреннего спроса. В этом смысле было бы разумно исследовать потенциал интеграции между Южно-Африканским таможенным союзом и Сообществом развития Юга Африки.

trade integration, regional economic integration, regional economic growth, economies of scale effect, intra-SACU trade, South Africaторговая интеграция, региональная экономическая интеграция, региональный экономический рост, эффект масштаба, торговля внутри ЮАТС, Южная АфрикаAkkoyunlu-Wigley, A., Mihci, S., & Arslan, H. (2006). The custom union with EU and its impact on Turkey’s economic growth. In: 8th ETSG Annual Conference–Vienna. https://www.etsg.org/ETSG2006/papers/akkoyunlu.pdfBasnet, H. C., & Pradhan, G. (2017). Regional economic integration in Mercosur: The role of real and financial sectors. Review of development finance, 7 (2), 107-119. https://hdl.handle.net/10520/EJC-fa3133cbfBong, A., & Premaratne, G. (2018). Regional integration and economic growth in Southeast Asia. Global Business Review, 19 (6), 1403–1415. https://doi.org/10.1177/0972150918794568Bostan, I., Toma, C., Aevoae, G., Robu, I. B., Mardiros, D. N., & Topliceanu, Ș. C. (2023). Effects of Internal and External Factors on Economic Growth in Emerging Economies: Evidence from CEE Countries. Eastern European Economics, 61 (1), 66-85. https://doi.org/10.1080/00128775.2022.2109489Caceres, L. R. (2011). Economic integration and unemployment in Mercosur. Journal of Economic Integration, 26 (1), 45-65. https://www.jstor.org/stable/23000908Campos, G. L. (2016). From success to failure: under what conditions did Mercosur integrate? Journal of Economic Integration, 31 (4), 855-897. https://www.jstor.org/stable/44028249Chang, W. W. (2018). Brexit and its economic consequences. The World Economy, 41 (9), 2349–2373. https://doi.org/10.1111/twec.12685Chineye, O. L. U., Nteegah, A., & Kalu, S. E. (2020). Regional Economic Integration: Implications on Economic Growth in Nigeria. Global Journal of Social Sciences Studies, 6 (2), 128-138. https://doi.org/10.20448/807.6.2.128.138Doctor, M. (2013). Prospects for deepening Mercosur integration: Economic asymmetry and institutional deficits. Review of International Political Economy, 20 (3), 515-540. https://doi.org/10.1080/09692290.2012.671763Ehigiamusoe, K. U., & Lean, H. H. (2019a). Do economic and financial integration stimulate economic growth? A critical survey. Economics, 13 (1), 20190004. https://doi.org/10.5018/economics-ejournal.ja.2019-4Ehigiamusoe, K. U., & Lean, H. H. (2019b). Economic union, finance and growth: A prognosis in West Africa. African Development Review, 31 (4), 434-447. https://doi.org/10.1111/1467–8268.12402Hoang, D. T., Do, A. D., & Trinh, M. V. (2021). Spillover effects of FDI on technology innovation of vietnamese enterprises. The Journal of Asian Finance, Economics and Business, 8 (1), 655-663. https://doi.org/10.13106/jafeb.2021.vol8.no1.655Karakaş, Ü. Ç., Karakaş, A., &Topal, S. (2019). Economic Growth Effects of Economic Integration: An Economic Analysis on Turkish Economy in the Context of the European Union and Shanghai Cooperation Organization. Alphanumeric Journal, 7 (2), 185-204. https://doi.org/10.17093/alphanumeric.604525Khachoo, Q., & Sharma, R. (2016). FDI and innovation: An investigation into intra-and inter-industry effects. Global Economic Review, 45 (4), 311-330. https://doi.org/10.1080/1226508X.2016.1218294Kim, B., Kyophilavong, P., Nozaki, K., & Charoenrat, T. (2022). Does the export-led growth hypothesis hold for Myanmar? Global Business Review, 23 (1), 48-60. https://doi.org/10.1177/0972150919863929 Kirk, R., & Stern, M. (2005). The new Southern African customs union agreement. The World Economy, 28 (2), 169-190. https://doi.org/10.1111/j.1467–9701.2005.00619.xKollie, G. B. (2020). Export-led growth hypothesis in ECOWAS: A panel data analysis. African Journal of Economic Review, 8 (2), 258-275. https://www.ajol.info/index.php/ajer/article/view/197214Lee, H. S., & Yu, W. (2022). The Effects of FDI and Exports on Economic Growth of Russia and its Far Eastern District. Eastern European Economics, 60 (6), 479-497. https://doi.org/10.1080/00128775.2022.2114914MacCarthy, C. L. (1994). Revenue distribution and economic development in the Southern African Customs Union. South African Journal of Economics, 62 (3), 167-187. https://doi.org/10.1111/j.1813–6982.1994.tb01224.xMalefane, M. R. (2021). Export-led growth hypothesis: Empirical evidence from the Southern African Customs Union countries. Entrepreneurial Business and Economics Review, 9 (2), 55-69. https://doi.org/10.15678/EBER.2021.090204Malefane, M. R., & Odhiambo, N. M. (2021). Trade openness and economic growth: empirical evidence from Lesotho. Global Business Review, 22 (5), 1103–1119. https://doi.org/10.1177/0972150919830812Manwa, F., & Wijeweera, A. (2016). Trade liberalisation and economic growth link: The case of Southern African Custom Union countries. Economic Analysis and Policy, 51, 12-21. https://doi.org/10.1016/j.eap.2016.05.001Manwa, F., Wijeweera, A., & Kortt, M. A. (2019). Trade and growth in SACU countries: A panel data analysis. Economic Analysis and Policy, 63, 107-118. https://doi.org/10.1016/j.eap.2019.05.003Meier, G. M. (1960). Effects of a customs union on economic development. Social and Economic Studies, 9 (1), 29-36. https://www.jstor.org/stable/27853562Miron, D., Dima, A. M., & Vasilache, S. (2010). Models of the intra-regional trade influence on economic sustainable development in Romania. Amfiteatru Economic, 12 (27), 27-35.Orji, A., Okafor, S., Obi, K., & Ukeje, C. (2022). The Effects of Regional Integration on Economic Growth in ECOWAS Countries. Journal of International Economic Relations and Development Economics, 2 (2), 1-20. https://www.theinterscholar.org/journals/index.php/jierade/article/view/153Salmon, J. (2021). The Impact of Public Debt on Economic Growth. Cato Institute. United States of America. https://policycommons.net/artifacts/1897935/the-impact-of-public-debt-on-economic-growth/2649047/ Seck, A., Fall, F. A., & Aidara, K. (2020). Regional integration and growth spillovers: Is Africa an economic space? Journal of African Trade, 7 (1/2), 37-44. https://doi.org/10.2991/jat.k.200724.001Shah, M. I. (2021). Investigating the role of regional economic integration on growth: fresh insights from South Asia. Global Journal of Emerging Market Economies, 13 (1), 35-57. https://doi.org/10.1177/0974910120974800Su, D. T., Nguyen, P. C., & Christophe, S. (2019). Impact of foreign direct investment, trade openness and economic institutions on growth in emerging countries: The case of Vietnam. Journal of International Studies, 12 (3), 243-264. https://doi.org/10.14254/2071–8330.2019/12-3/20Vahter, P. (2011). Does FDI spur productivity, knowledge sourcing and innovation by incumbent firms? Evidence from manufacturing industry in Estonia. The World Economy, 34 (8), 1308–1326. https://doi.org/10.1111/j.1467–9701.2011.01379.xWooster, R. B., Banda, T. M., & Dube, S. (2008). The contribution of intra-regional and extra-regional trade to growth: Evidence from the European Union. Journal of economic Integration, 23 (1), 161-182. https://www.jstor.org/stable/23001116Akkoyunlu-Wigley, A., Mihci, S., & Arslan, H. (2006). The custom union with EU and its impact on Turkey’s economic growth. In: 8th ETSG Annual Conference–Vienna. https://www.etsg.org/ETSG2006/papers/akkoyunlu.pdfBasnet, H. C., & Pradhan, G. (2017). Regional economic integration in Mercosur: The role of real and financial sectors. Review of development finance, 7 (2), 107-119. https://hdl.handle.net/10520/EJC-fa3133cbfBong, A., & Premaratne, G. (2018). Regional integration and economic growth in Southeast Asia. Global Business Review, 19 (6), 1403–1415. https://doi.org/10.1177/0972150918794568Bostan, I., Toma, C., Aevoae, G., Robu, I. B., Mardiros, D. N., & Topliceanu, Ș. C. (2023). Effects of Internal and External Factors on Economic Growth in Emerging Economies: Evidence from CEE Countries. Eastern European Economics, 61 (1), 66-85. https://doi.org/10.1080/00128775.2022.2109489Caceres, L. R. (2011). Economic integration and unemployment in Mercosur. Journal of Economic Integration, 26 (1), 45-65. https://www.jstor.org/stable/23000908Campos, G. L. (2016). From success to failure: under what conditions did Mercosur integrate? Journal of Economic Integration, 31 (4), 855-897. https://www.jstor.org/stable/44028249Chang, W. W. (2018). Brexit and its economic consequences. The World Economy, 41 (9), 2349–2373. https://doi.org/10.1111/twec.12685Chineye, O. L. U., Nteegah, A., & Kalu, S. E. (2020). Regional Economic Integration: Implications on Economic Growth in Nigeria. Global Journal of Social Sciences Studies, 6 (2), 128-138. https://doi.org/10.20448/807.6.2.128.138Doctor, M. (2013). Prospects for deepening Mercosur integration: Economic asymmetry and institutional deficits. Review of International Political Economy, 20 (3), 515-540. https://doi.org/10.1080/09692290.2012.671763Ehigiamusoe, K. U., & Lean, H. H. (2019a). Do economic and financial integration stimulate economic growth? A critical survey. Economics, 13 (1), 20190004. https://doi.org/10.5018/economics-ejournal.ja.2019-4Ehigiamusoe, K. U., & Lean, H. H. (2019b). Economic union, finance and growth: A prognosis in West Africa. African Development Review, 31 (4), 434-447. https://doi.org/10.1111/1467–8268.12402Hoang, D. T., Do, A. D., & Trinh, M. V. (2021). Spillover effects of FDI on technology innovation of vietnamese enterprises. The Journal of Asian Finance, Economics and Business, 8 (1), 655-663. https://doi.org/10.13106/jafeb.2021.vol8.no1.655Karakaş, Ü. Ç., Karakaş, A., &Topal, S. (2019). Economic Growth Effects of Economic Integration: An Economic Analysis on Turkish Economy in the Context of the European Union and Shanghai Cooperation Organization. Alphanumeric Journal, 7 (2), 185-204. https://doi.org/10.17093/alphanumeric.604525Khachoo, Q., & Sharma, R. (2016). FDI and innovation: An investigation into intra-and inter-industry effects. Global Economic Review, 45 (4), 311-330. https://doi.org/10.1080/1226508X.2016.1218294Kim, B., Kyophilavong, P., Nozaki, K., & Charoenrat, T. (2022). Does the export-led growth hypothesis hold for Myanmar? Global Business Review, 23 (1), 48-60. https://doi.org/10.1177/0972150919863929 Kirk, R., & Stern, M. (2005). The new Southern African customs union agreement. The World Economy, 28 (2), 169-190. https://doi.org/10.1111/j.1467–9701.2005.00619.xKollie, G. B. (2020). Export-led growth hypothesis in ECOWAS: A panel data analysis. African Journal of Economic Review, 8 (2), 258-275. https://www.ajol.info/index.php/ajer/article/view/197214Lee, H. S., & Yu, W. (2022). The Effects of FDI and Exports on Economic Growth of Russia and its Far Eastern District. Eastern European Economics, 60 (6), 479-497. https://doi.org/10.1080/00128775.2022.2114914MacCarthy, C. L. (1994). Revenue distribution and economic development in the Southern African Customs Union. South African Journal of Economics, 62 (3), 167-187. https://doi.org/10.1111/j.1813–6982.1994.tb01224.xMalefane, M. R. (2021). Export-led growth hypothesis: Empirical evidence from the Southern African Customs Union countries. Entrepreneurial Business and Economics Review, 9 (2), 55-69. https://doi.org/10.15678/EBER.2021.090204Malefane, M. R., & Odhiambo, N. M. (2021). Trade openness and economic growth: empirical evidence from Lesotho. Global Business Review, 22 (5), 1103–1119. https://doi.org/10.1177/0972150919830812Manwa, F., & Wijeweera, A. (2016). Trade liberalisation and economic growth link: The case of Southern African Custom Union countries. Economic Analysis and Policy, 51, 12-21. https://doi.org/10.1016/j.eap.2016.05.001Manwa, F., Wijeweera, A., & Kortt, M. A. (2019). Trade and growth in SACU countries: A panel data analysis. Economic Analysis and Policy, 63, 107-118. https://doi.org/10.1016/j.eap.2019.05.003Meier, G. M. (1960). Effects of a customs union on economic development. Social and Economic Studies, 9 (1), 29-36. https://www.jstor.org/stable/27853562Miron, D., Dima, A. M., & Vasilache, S. (2010). Models of the intra-regional trade influence on economic sustainable development in Romania. Amfiteatru Economic, 12 (27), 27-35.Orji, A., Okafor, S., Obi, K., & Ukeje, C. (2022). The Effects of Regional Integration on Economic Growth in ECOWAS Countries. Journal of International Economic Relations and Development Economics, 2 (2), 1-20. https://www.theinterscholar.org/journals/index.php/jierade/article/view/153Salmon, J. (2021). The Impact of Public Debt on Economic Growth. Cato Institute. United States of America. https://policycommons.net/artifacts/1897935/the-impact-of-public-debt-on-economic-growth/2649047/ Seck, A., Fall, F. A., & Aidara, K. (2020). Regional integration and growth spillovers: Is Africa an economic space? Journal of African Trade, 7 (1/2), 37-44. https://doi.org/10.2991/jat.k.200724.001Shah, M. I. (2021). Investigating the role of regional economic integration on growth: fresh insights from South Asia. Global Journal of Emerging Market Economies, 13 (1), 35-57. https://doi.org/10.1177/0974910120974800Su, D. T., Nguyen, P. C., & Christophe, S. (2019). Impact of foreign direct investment, trade openness and economic institutions on growth in emerging countries: The case of Vietnam. Journal of International Studies, 12 (3), 243-264. https://doi.org/10.14254/2071–8330.2019/12-3/20Vahter, P. (2011). Does FDI spur productivity, knowledge sourcing and innovation by incumbent firms? Evidence from manufacturing industry in Estonia. The World Economy, 34 (8), 1308–1326. https://doi.org/10.1111/j.1467–9701.2011.01379.xWooster, R. B., Banda, T. M., & Dube, S. (2008). The contribution of intra-regional and extra-regional trade to growth: Evidence from the European Union. Journal of economic Integration, 23 (1), 161-182. https://www.jstor.org/stable/23001116