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Does Trade Openness Affect the Speed of Output Convergence? Some Empirical Evidence

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  • David Giles

    ()

  • Chad Stroomer

Abstract

In this paper we develop flexible techniques for measuring the speed of output convergence between countries when such convergence may be of an unknown non-linear form. We then calculate these convergence speeds for various countries, in terms of half-lives, using a time-series data-set for 88 countries. These calculations are based on both nonparametric kernel regression and ‘fuzzy’ regression, and the results are compared with more restrictive estimates based on the assumption of linear convergence. The calculated half-lives are regressed, again in various flexible ways, on cross-section data for the degree of openness to trade. We find evidence that favours the hypothesis that increased trade openness is associated with a faster rate of convergence in output between countries.

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File URL: http://hdl.handle.net/10.1007/s00181-006-0060-y
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Bibliographic Info

Article provided by Springer in its journal Empirical Economics.

Volume (Year): 31 (2006)
Issue (Month): 4 (November)
Pages: 883-903

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Handle: RePEc:spr:empeco:v:31:y:2006:i:4:p:883-903

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Related research

Keywords: Openness; Convergence; Fuzzy regression; Lyapunov coefficient; C14; C21; C22; F15; F43; O4;

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References

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Cited by:
  1. Joseph LiPuma & Scott Newbert & Jonathan Doh, 2013. "The effect of institutional quality on firm export performance in emerging economies: a contingency model of firm age and size," Small Business Economics, Springer, vol. 40(4), pages 817-841, May.
  2. Hui Feng & David E. Giles, 2007. "Bayesian Fuzzy Regression Analysis and Model Selection: Theory and Evidence," Econometrics Working Papers 0710, Department of Economics, University of Victoria.

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