Relationship between Commodity Dependence and Macroeconomic Variables on Selected Sub-Saharan Countries

This study used economic growth proxied by real GDP sourced from World Development Indicators. Economic growth has been used because it’s the most common variable used to measure macroeconomic performance (Bidarkota and Crucini, 2014).

Other data for the study were sourced from WDI and were exports, imports, gross capital formation (% of GDP), population growth (annual %), and mineral and metal ores rent of the country of interest. The Commodity Dependence Index (〖CDI〗_(i,t) ) of country i at time t was computed as the as the ratio of export value of the dependent commodity to the total export value of the country. According to Carmignani (2010), different measures of commodity dependence yield different prediction accuracies that are largely influenced by the interaction of the fixed effects measures with the endogenous variables.