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Trade Structure, FTAs, and Economic Growth


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  • Chan-Hyun Sohn
  • Hongshik Lee
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    What is the relationship between trade and economic growth? Does trade positively affect economic growth? Owing to the ambiguity of this relationship, the empirical relationship has remained open ( Rodriguez and Rodrik, 2001 ; Baldwin, 2003 ). This paper introduces "trade structure" variables, borrowed from the paper of Lederman and Maloney (2003 ), and applies them to the relationship. A dynamic panel estimation for the data of 66 countries during 1991-2004 is used to verify the validity and robustness of the relationship. Trade structure variables show strong evidence of positive effects on growth. Free-trade agreements/areas (FTAs) also enhance economic growth. East Asia shows a different relationship between trade and growth than the world and reflects a weaker role of FTAs in its growth. Copyright (C) 2010 Blackwell Publishing Ltd.

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    Article provided by Wiley Blackwell in its journal Review of Development Economics.

    Volume (Year): 14 (2010)
    Issue (Month): s1 (08)
    Pages: 683-698

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    Handle: RePEc:bla:rdevec:v:14:y:2010:i:s1:p:683-698

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