Trade in Services and Economic Benefits in an Emerging Market Economy
Trade in Services and Economic Benefits in an Emerging Market Economy

Summary/Abstract: This article presents an examination of the impact of trade in services on economic growth in an emerging market economy. The study unveiled the unexplored potential and challenges of trade in services in an emerging market economy. Time series annual data for Zimbabwe for the period 1970 to 2016 was used for the purposes of this study. The period 1970 to 2016 was selected mainly due to data availability. Time series data was extracted from the World Bank`s World Development Indicators and United Nations Conference on Trade and Development statistic databases. Trade in services was found to correlate with economic growth with an R2 of 0.9796, an Adj. R2 of 0.9740, a p-value of less than 0.05 at 5% level of significance and an F (10, 36) = 173.30, Prob > F = .0000. The variables were found to statistically significantly predict GDP per capital. Service imports and trade in services were significant in influencing economic growth. With service exports insignificant in influencing economic growth at 5% level of significance. Government policies were found to hinder trade in services in emerging market economies. These economies are closed with many restrictions in place. The study is expected to influence government policy in developing economies. The study will also go a long way in expanding the academic knowledge and as such contributing in filling the gap that exists within the body of knowledge.

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