For the requirements for the degree of Doctor in finance and international trade

Abstract

This study aims to examine the effect of foreign trade liberalization on Algeria’s balance of payments over the period from 1989 to 2020. We used an Autoregressive Distributed lag model, the ordinary least squares estimation technique, the Box-Jenkins approach and the Cox proportional hazards model. The results of this study indicate that Algeria’s current account is unsustainable. Trade openness is the main factor negatively affecting export diversification. Counter-intuitive relationship between economic risk and export diversification, in which an increase in Algeria’s economic risk index (i.e., a decrease in economic risk) will result in a decline in export diversification. A little positive impact of financial risk on export diversification. Algeria’s political risk index does not affect export diversification. Continued deterioration of Algeria’s trade balance (excluding hydrocarbon exports) within the association agreement between Algeria and the European Union. Furthermore, that agreement did not improve the industrial competitiveness performance of Algeria. Trade openness has no impact on Algeria’s accession to the World Trade Organization (WTO).