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Openness, Growth, and Development: Evidence from a Panel of East Asian Countries

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Listed:
  • Zohreh Shirani Fakhr

    (M.A. of Economics, University of Isfahan)

  • Azita Sheikhbahaie

    (M.A. of Economics, University of Isfahan)

Abstract

This paper examines the interaction between openness, growth, and development using a panel of ten developing East Asian countries (China, Japan, Korea, Malaysia, Indonesia, the Philippines, Singapore, Hong Kong, Macao and Vietnam) and five-year averages for the period, 1975-2005. Its primary objective is to determine whether there is a direct link between the level of development and openness, while controlling for the indirect effect of openness through its impact on economic growth. Using a two-equation simultaneous-equations model of development and growth and an alternative measure of openness, our findings suggest that openness has a positive influence on both economic growth and human development. We also find that while economic growth makes a positive contribution to development, the converse is not true in that the more developed a nation the slower its growth rate.

Suggested Citation

  • Zohreh Shirani Fakhr & Azita Sheikhbahaie, 2008. "Openness, Growth, and Development: Evidence from a Panel of East Asian Countries," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 13(2), pages 157-174, fall.
    • Handle: RePEc:eut:journl:v:13:y:2008:i:2:p:157
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    References listed on IDEAS

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