The Effect of Trade Openness and Economic Freedom on Economic Growth: the Case of Middle East and East Asian Countries
AbstractOne of the rudiment features of international trade theory is that open economies achieve high economic growth rates than closed economies. The current study aims to investigate how economic freedom impacts economic growth. Therefore, economic growth model is estimated by using 17(Middle East and East Asian) countries’ data during 2000-2009.In order to testing the data, panel data analysis is employed. The results show that overall index of economic freedom is positively and robustly correlated with growth, further, the results demonstrate that trade openness is positively associated and statistically significant determinant of growth. We find that economic freedom has significant effect on economic growth. Furthermore, we decompose the economic freedom index into the five categories constructing the index and observed that just index of size of government and index of access to sound money is negatively correlated with growth
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Bibliographic InfoArticle provided by Econjournals in its journal International Journal of Economics and Financial Issues.
Volume (Year): 3 (2013)
Issue (Month): 2 ()
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Web page: http://www.econjournals.com
: Economic Freedom; Openness; Economic Growth; Panel Data;
Find related papers by JEL classification:
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- O50 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - General
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- De Vanssay, Xavier & Spindler, Z A, 1994. " Freedom and Growth: Do Constitutions Matter?," Public Choice, Springer, vol. 78(3-4), pages 359-72, March.
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