1. IntroductionIn today's era of globalization, trade liberalization is emerging as one of the most serious policy concerns for governments around the world, especially for developing countries. Trade liberalization is believed to promote economic growth and development through specialization and technological progress (Hoque and Yusop, 2010). The role of trade policy in economic development was a key debate in the development literature for most of the second half of the 20th century. While the prevailing wisdom in the 1950s and 1960s favored import substitution, that of the 1970s and 1980s favored export promotion/outward orientation (Greenaway et al., 2002). There are a number of empirical studies linking economic growth to the openness of the trade regime. (Krueger, 1978; Heitger 1987; World Bank 1987; Romer 1989; Quah and Rauch 1990; Michaely et al., 1991; Dollar, 1992; Edwards, 1992; Harrison, 1995; Savvides, 1995; Bakht, 1998; Onafowora and Owoye , 1998). In contrast, other studies find little empirical evidence supporting a link between trade liberalization and economic growth (see Sachs, 1987; UNCTAD, 1989; Shafaeddin, 1994; Clarke and Kirkpatrick, 1992; Greenaway and Sapsford, 1994; Karunaratne, 1994; A possible link between openness and growth has been an important factor in spurring an unprecedented wave of unilateral trade reforms, with more than 100 countries engaging in some form of trade liberalization in recent years. 20 years old. Many of these programs were voluntary; However, most have been linked to the policy conditionality that is at the heart of the World Bank's Structural Adjustment Loans (SAPs). Indeed, trade reforms account for a higher proportion...... middle of paper...... have a small sample size. It is well known that the cointegration methods of Engle & Granger (1987) and Johansen (1988, 1995) are not reliable for small sample sizes, such as that of the present study. Several previous studies, however, have applied the ARDL approach to relatively small sample sizes. Gounder (1999, 2002) used the ARDL methodology to empirically test various growth hypotheses for Fiji using sample sizes similar to those in this study. Pattichis (1999), Mah (2000), Tang and Nair (2002) and Tang (2001, 2003) applied the ARDL bounds testing approach to estimate the import demand function using small samples. Tang (2003) applied the ARDL Bounds testing approach to estimate the import demand function for Japan with only 18 annual observations. We have 27 annual observations. Therefore, applying the ARDL Bounds testing approach is very suitable..