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Trade openness and growth: A network‐based approach

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  • Georg Duernecker
  • Moritz Meyer
  • Fernando Vega‐Redondo

Abstract

We propose a novel approach to the study of international trade based on a theory of country integration that embodies a broad systemic viewpoint on the relationship between trade and growth. Our model leads to an indicator of country openness that measures a country's level of integration through the full architecture of its connections in the trade network. We apply our methodology to a sample of 204 countries and find a sizable and significant positive relationship between our integration measure and a country's growth rate, while that of the traditional measures of outward orientation is only minor and statistically insignificant.

Suggested Citation

  • Georg Duernecker & Moritz Meyer & Fernando Vega‐Redondo, 2022. "Trade openness and growth: A network‐based approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 37(6), pages 1182-1203, September.
    • Handle: RePEc:wly:japmet:v:37:y:2022:i:6:p:1182-1203
    DOI: 10.1002/jae.2920
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