While various theoretical models predict that openness to international trade accelerates productivity and promotes economic growth, the empirical evidence has been mixed or imprecise. This paper investigates the issue using two panel data sets: one of 56 countries covering the period 1951-1998, and another of 105 countries over 1960-1997. The results show that the effect of trade openness on economic growth is positive, permanent, statistically significant, and economically sizable. This effect is robust across the two data sets used and a number of different estimation methods and lag lengths. Specifically, it is shown that increasing trade (exports plus imports) as a fraction of GDP by 10 percentage points, permanently increases the real growth rate of GDP per capita by 0.25 to 0.3 percent.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
For technical questions regarding this item, or to correct its listing, contact: (M. Carmen Guisan).
Related research
Keywords:
Other versions of this item:
Find related papers by JEL classification: F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)