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Growth spillover through trade: A spatial dynamic panel data approach

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  • Ho, Chun-Yu
  • Wang, Wei
  • Yu, Jihai

Abstract

This paper empirically examines the international spillover of economic growth through bilateral trade. We extend the Solow growth model with a spatial autoregressive term and a spatial time lag term, and estimate such a model with a sample of 26 OECD countries over the period 1971–2005. We find that there is a positive spillover effect of growth from one country to its trade partners. The implied rate of convergence is higher after including the spatial terms.

Suggested Citation

  • Ho, Chun-Yu & Wang, Wei & Yu, Jihai, 2013. "Growth spillover through trade: A spatial dynamic panel data approach," Economics Letters, Elsevier, vol. 120(3), pages 450-453.
    • Handle: RePEc:eee:ecolet:v:120:y:2013:i:3:p:450-453
    DOI: 10.1016/j.econlet.2013.05.027
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    References listed on IDEAS

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    More about this item

    Keywords

    Convergence; Dynamic panels; Spatial effect; Spillover;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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