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Trade Intensity, Net Export, and Economic Growth

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  • Pak Hung Mo

Abstract

Many studies suggest the positive causal effects of trade on productivity and growth. However, controversies are still prevalent among vast empirical studies on the issue. In this paper, I propose a standard empirical framework for investigating GDP growth and apply the framework to estimate the growth effects and transmission channels of per capita trade. Based on prior information, theoretical reasoning, and various empirical evidences, I conclude that international trade has positive independent effects on economic performance. A 1% increase in per capita trade raises the equilibrium GDP growth by 0.29%. Copyright (C) 2010 Blackwell Publishing Ltd.

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  • Pak Hung Mo, 2010. "Trade Intensity, Net Export, and Economic Growth," Review of Development Economics, Wiley Blackwell, vol. 14(s1), pages 563-576, August.
  • Handle: RePEc:bla:rdevec:v:14:y:2010:i:s1:p:563-576
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    References listed on IDEAS

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    1. Mo, Pak Hung, 2000. "Income Inequality and Economic Growth," Kyklos, Wiley Blackwell, vol. 53(3), pages 293-315.
    2. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    3. Robert J. Barro, 1998. "Determinants of Economic Growth: A Cross-Country Empirical Study," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522543, March.
    4. Yanikkaya, Halit, 2003. "Trade openness and economic growth: a cross-country empirical investigation," Journal of Development Economics, Elsevier, vol. 72(1), pages 57-89, October.
    5. Mo, Pak Hung, 2001. "Corruption and Economic Growth," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 66-79, March.
    6. Francisco Alcalá & Antonio Ciccone, 2004. "Trade and Productivity," The Quarterly Journal of Economics, Oxford University Press, vol. 119(2), pages 613-646.
    7. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
    8. Grossman, Gene M. & Helpman, Elhanan, 1991. "Trade, knowledge spillovers, and growth," European Economic Review, Elsevier, vol. 35(2-3), pages 517-526, April.
    9. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
    10. Pak Hung Mo, 2003. "Land Distribution Inequality And Economic Growth: Transmission Channels And Effects," Pacific Economic Review, Wiley Blackwell, vol. 8(2), pages 171-181, June.
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