How Much Do Trading Partners Matter for Economic Growth?
AbstractThis paper empirically examines the extent to which a country's economic growth is influenced by its trading partner economies. Panel estimation results based on four decades of data for over 100 countries show that trading partners' growth and relative income levels have a strong effect on domestic growth, even after controlling for the influence of common global and regional trends. One interpretation is that conditional convergence is stronger, the richer are a country's trading partners. A general implication of the results is that industrial countries benefit from trading with developing countries, which grow rapidly, while developing countries benefit from trading with industrial countries, which have relatively high incomes.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 04/26.
Date of creation: 01 Feb 2004
Date of revision:
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Postal: International Monetary Fund, Washington, DC USA
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-10-22 (All new papers)
- NEP-DEV-2005-10-22 (Development)
- NEP-INT-2005-10-22 (International Trade)
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