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Institutions and Trade: Competitors or Complements in Economic Development?

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  • SAMBIT BHATTACHARYYA
  • STEVE DOWRICK
  • JANE GOLLEY

Abstract

This article contributes to the debate over the empirical relationship between trade openness and economic development. Unlike previous studies which treat trade openness and institutions as competitors in economic development, we find evidence that they are in fact complements. We also find that in order for a country to benefit from trade, its institutional quality has to be above a certain threshold level. These results are suggestive of an important complementary role for trade openness and institutions in economic development. Copyright © 2009 The Economic Society of Australia.

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Bibliographic Info

Article provided by The Economic Society of Australia in its journal Economic Record.

Volume (Year): 85 (2009)
Issue (Month): 270 (09)
Pages: 318-330

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Handle: RePEc:bla:ecorec:v:85:y:2009:i:270:p:318-330

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Cited by:
  1. Aljaz Kuncic, 2012. "Institutional Determinants of Bilateral Trade: Taking Another Look," Kiel Advanced Studies Working Papers 462, Kiel Institute for the World Economy.
  2. Li, Kui-Wai, 2011. "The Optimal Level and Impact of Internal Factors on Growth," MPRA Paper 36419, University Library of Munich, Germany.
  3. Valeria Costantini & Paolo Liberati, 2011. "Technology transfer, institutions and development," Departmental Working Papers of Economics - University 'Roma Tre' 0135, Department of Economics - University Roma Tre.
  4. Sambit Bhattacharyya, 2008. "Trade Liberalization And Institutional Development," Departmental Working Papers 2008-13, The Australian National University, Arndt-Corden Department of Economics.

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