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Institutions And Trade: Competitors Or Complements In Economic Development?

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  • Sambit Bhattacharyya
  • Steve Dowrick
  • Jane Golley

Abstract

In this paper we contribute to the debate over the empirical relationship between trade openness and economic development. Unlike previous studies which treat trade openness and institutions as competitors in economic development, we find evidence that they are in fact complements. We also find that in order for a country to benefit from trade, its institutional quality has to be above a threshold level. These results are suggestive of a very important complementary role of both trade openness and institutions in economic development.

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File URL: https://crawford.anu.edu.au/acde/publications/publish/papers/wp2008/wp_econ_2008_12.pdf
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Bibliographic Info

Paper provided by The Australian National University, Arndt-Corden Department of Economics in its series Departmental Working Papers with number 2008-12.

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Length: 31 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:pas:papers:2008-12

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Keywords: Trade; Institutions; Economic Development;

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Citations

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Cited by:
  1. Bhattacharyya, Sambit, 2012. "Trade liberalization and institutional development," Journal of Policy Modeling, Elsevier, vol. 34(2), pages 253-269.
  2. Valeria Costantini & Paolo Liberati, 2011. "Technology transfer, institutions and development," Departmental Working Papers of Economics - University 'Roma Tre' 0135, Department of Economics - University Roma Tre.
  3. Li, Kui-Wai, 2011. "The Optimal Level and Impact of Internal Factors on Growth," MPRA Paper 36419, University Library of Munich, Germany.
  4. Aljaz Kuncic, 2012. "Institutional Determinants of Bilateral Trade: Taking Another Look," Kiel Advanced Studies Working Papers 462, Kiel Institute for the World Economy.

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