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The relationship between international trade openness and economic growth in the developing economies

Author

Listed:
  • Muhammad Tahir
  • Toseef Azid

Abstract

Purpose - – This paper aims to establish a relationship between trade openness and economic growth in the context of the developing countries. This study has proposed a new measure of trade openness to the literature, as the available measures are flawed. Design/methodology/approach - – Empirical analyses are carried out with the help of panel econometric techniques. Findings - – The main finding of the paper is that the relationship between trade openness and economic growth is positive and statistically significant for developing countries. Besides trade openness, other determinants of economic growth such as investment and labour force are also significantly related with economic growth and carry expected coefficients. Further, it is found that frequent fluctuations in prices are detrimental to long-run economic growth. Practical implications - – Therefore, the developing countries are suggested to speed up the process of trade liberalization and also pay favourable attention to other determinants of economic growth to achieve high economic growth. Originality/value - – The authors have used a new measure of trade openness apart from the conventional trade volume measure of trade openness.

Suggested Citation

  • Muhammad Tahir & Toseef Azid, 2015. "The relationship between international trade openness and economic growth in the developing economies," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing Limited, vol. 8(2), pages 123-139, June.
    • Handle: RePEc:eme:jcefts:v:8:y:2015:i:2:p:123-139
    DOI: 10.1108/JCEFTS-02-2015-0004
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    Citations

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    Cited by:

    1. Umar FAROOQ, 2023. "Trade Liberalization and Real Sector Investment Decisions: A Panel Data Evidence from Selected Economies of Asia," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 52-71, June.

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