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Trade Liberalization and International Trade: A Case Study of China

Author

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  • Adel Shakeeb MOHSEN

    (British Institute of Management and Technology)

Abstract

This study investigates the effect of trade liberalization on international trade in China over the period 1980-2018. Trade openness is used as an indicator of trade liberalization. Unit root test, cointegration test, Granger causality tests, and IRFs were used in this study. The cointegration test shows that trade openness has a positive effect on exports and imports. Trade openness has a greater effect on exports than imports. Besides, export and import are positively related to gross fixed capital formation and inflation, but negatively related to oil price. Furthermore, the Granger causality test indicates that there are bidirectional short- and long-run causality relationships between trade openness and exports, and also between trade openness and imports.

Suggested Citation

  • Adel Shakeeb MOHSEN, 2020. "Trade Liberalization and International Trade: A Case Study of China," Journal of Economics and Financial Analysis, Tripal Publishing House, vol. 4(1), pages 1-14.
    • Handle: RePEc:trp:01jefa:jefa0034
    DOI: 10.1991/jefa.v4i1.a30
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    References listed on IDEAS

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    More about this item

    Keywords

    Trade Liberalization; China; Cointegration; Causality Test; Trade Openness.;
    All these keywords.

    JEL classification:

    • B17 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - International Trade and Finance
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F00 - International Economics - - General - - - General
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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