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Causal Relationship between Trade Openness and Economic Growth: A Panel Data Analysis of Asian Countries

Author

Listed:
  • Khandaker Jahangir Alam

    (Department of Economics, Begum Rokeya University, Rangpur 5400, Bangladesh,)

  • Khairul Kabir Sumon

    (Department of Finance and Banking, Begum Rokeya University, Rangpur 5400, Bangladesh)

Abstract

This paper examines the causal relationship between economic growth and trade openness for 15 Asian countries over period 1990 2017. We have applied panel cointegration and causality approaches to examine the long-run and causal relationship between variables. Empirical results confirm the presence of cointegration between variables. The impact of trade openness on economic growth is found to be positive. The panel VECM Granger causality analysis reveals the bidirectional causality between economic growth and trade openness.

Suggested Citation

  • Khandaker Jahangir Alam & Khairul Kabir Sumon, 2020. "Causal Relationship between Trade Openness and Economic Growth: A Panel Data Analysis of Asian Countries," International Journal of Economics and Financial Issues, International Journal of Economics and Financial Issues, vol. 10(1), pages 118-126.
    • Handle: RePEc:eco:journ1:2020-01-15
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    18. Melina Dritsaki & Chaido Dritsaki, 2020. "Trade Openness and Economic Growth: A Panel Data Analysis of Baltic Countries," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(3), pages 313-324, March.
    19. Suwijak Suwanhirunkul & Prachaya Suwanhirunkul, 2025. "Trade Openness and Economic Growth: The Role of Financial Development in ASEAN Countries," South Asian Journal of Macroeconomics and Public Finance, , vol. 14(2), pages 260-280, December.
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    Keywords

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    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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