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Analysis of border trade impacts on economic growth of Yunnan and the Greater Mekong Sub-region (GMS) countries

Author

Listed:
  • Menglei Zhang

    (Chiang Mai University)

  • Kunchon Wattanakul

    (Chiang Mai University)

  • Nisit Panthamit

    (Chiang Mai University)

  • Chukiat Chaiboonsri

    (Chiang Mai University)

Abstract

The aim of this paper is to analyze the relationship between border trade and economic growth of Yunnan province, China and Greater Mekong Sub-region (GMS) Countries, which is represented by border import, border export and real GDP. We use annual data of Yunnan province and GMS countries from 1999 to 2010. This paper includes three steps: first, tests the panel unit root, second examines the panel co-integration and third investigates the Granger causality relationship among border export, border import and economic growth. There are four conclusions. First, the data of border import, border export and real GDP have a unit root at the level. Second, the time and entity fixed model is the best model to test the panel co-integration. Third, the border imports have long-run negative relationship with economic growth based on time and entity fixed effects model and the border export have long-run positive effects on economic growth based on entity fixed effects model. Last, the relationship between economic growth and border imports, which has only one-way granger causality relationship that means border imports effects on economic growth in long-run and short-run.

Suggested Citation

  • Menglei Zhang & Kunchon Wattanakul & Nisit Panthamit & Chukiat Chaiboonsri, 2012. "Analysis of border trade impacts on economic growth of Yunnan and the Greater Mekong Sub-region (GMS) countries," The Empirical Econometrics and Quantitative Economics Letters, Faculty of Economics, Chiang Mai University, vol. 1(2), pages 47-58, June.
    • Handle: RePEc:chi:journl:v:1:y:2012:i:2:p:47-58?
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    More about this item

    Keywords

    GMS countries; panel data; border trade; economic growth;
    All these keywords.

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • B17 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - International Trade and Finance
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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