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Impact of trade openness on poverty: a panel data analysis of a set of developing countries

Author

Listed:
  • Basanta K Pradhan

    (Institute of Economic Growth, Delhi)

  • Malvika Mahesh

    (Institute of Economic Growth, Delhi)

Abstract

The impact of trade openness on poverty has been in the limelight for a few decades now, since most developing countries relaxed their trade regimes. Poverty has always been a central issue for developing countries mainly because of their large vulnerable populations. In this paper, a panel of 25 developing countries is analyzed for three years to determine the effects of trade openness on poverty. We find that poverty has a negative and significant relationship with total trade, imports, exports and merchandise trade. The human capital (education) has negative impact on poverty. We also find that infrastructure and health have a positive impact on per capita GDP. This paper supports the view that an inward-oriented trade policy is neither good for growth nor for poverty.

Suggested Citation

  • Basanta K Pradhan & Malvika Mahesh, 2014. "Impact of trade openness on poverty: a panel data analysis of a set of developing countries," Economics Bulletin, AccessEcon, vol. 34(4), pages 2208-2219.
    • Handle: RePEc:ebl:ecbull:eb-14-00590
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    Cited by:

    1. Kunofiwa Tsaurai, 2021. "Energy Consumption-poverty Reduction nexus in BRICS Nations," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 555-562.
    2. Hauwah K. K. Abdulkareem & Sodiq Olaiwola Jimoh & Ebenezer Olubiyi, 2023. "Trade–peace conundrum in Africa: The moderating effects of poverty and inequality," African Development Review, African Development Bank, vol. 35(4), pages 323-335, December.
    3. Ahmed Mohamed Ezzat, 2018. "Trade Openness: An Effective tool for Poverty Alleviation or an Instrument for Increasing Poverty Severity?," Working Papers 1248, Economic Research Forum, revised 07 Nov 2018.
    4. Clement Olalekan Olaniyi & James Temitope Dada & Nicholas Mbaya Odhiambo & Xuan Vinh Vo, 2023. "Modelling asymmetric structure in the finance-poverty nexus: empirical insights from an emerging market economy," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(1), pages 453-487, February.
    5. Megha Chhabra & Arun Kumar Giri & Arya Kumar, 2023. "Does good governance and trade openness contribute to poverty reduction in BRICS? An empirical analysis," Australian Economic Papers, Wiley Blackwell, vol. 62(4), pages 650-667, December.
    6. Muhammad Shahid Hassan & Samra Bukhari & Noman Arshed, 2020. "Competitiveness, governance and globalization: What matters for poverty alleviation?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(4), pages 3491-3518, April.
    7. Noman Arshed & Sidra Nasir & Muhammad Ibrahim Saeed, 2022. "Impact of the External Debt on Standard of Living: A Case of Asian Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 163(1), pages 321-340, August.
    8. Basanta K Pradhan & Malvika Mahesh, 2016. "Impact of remittances on poverty: an analysis of data from a set of developing countries," Economics Bulletin, AccessEcon, vol. 36(1), pages 108-117.
    9. Tehmina Zahid & Noman Arshed & Mubbasher Munir & Kamran Hameed, 2021. "Role of energy consumption preferences on human development: a study of SAARC region," Economic Change and Restructuring, Springer, vol. 54(1), pages 121-144, February.
    10. Taha Zaghdoudi & Abdelaziz Hakimi, 2017. "Does external debt- poverty relationship confirm the debtoverhang hypothesis for developing counties?," Economics Bulletin, AccessEcon, vol. 37(2), pages 653-665.
    11. Kunofiwa Tsaurai & Bester Chimbo, 2020. "Technology, Poverty, and Education within the BRICS’ Context," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 471-487.

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    More about this item

    Keywords

    Poverty; Trade; Openness; GDP;
    All these keywords.

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • F1 - International Economics - - Trade

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