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Determinants of Trade Openness in Transitional Economies: Does the Complementarity between Foreign Direct Investment and Human Capital Development Matter?

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  • Kunofiwa Tsaurai

Abstract

Purpose: The study explored the determinants of trade openness in transitional economies. The impact of the complementarity between foreign direct investment (FDI) and human capital development on trade openness in transitional economies was also a subject of investigation. Design/Approach/Methodology: The study used panel data analysis methods, namely the dynamic generalized methods of moments (GMM), fixed effects, pooled ordinary least squares (OLS), random effects with panel data from 2000 to 2018. Findings: Human capital development, the interaction between FDI and human capital development, economic growth and mining sector growth were found to have a significant positive impact on trade openness in transitional economies. Practical Implication: Transitional economies are therefore urged to develop and implement policies earmarked at improving, FDI inflows, human capital development, economic growth, and mining sector growth if they intend not only to expand trade openness but to benefit from trade openness as well. Originality/Value: The impact of the complementarity between FDI and human capital development on trade openness has so far not yet been explored, to the author’s best knowledge.

Suggested Citation

  • Kunofiwa Tsaurai, 2021. "Determinants of Trade Openness in Transitional Economies: Does the Complementarity between Foreign Direct Investment and Human Capital Development Matter?," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 318-330.
    • Handle: RePEc:ers:ijebaa:v:ix:y:2021:i:1:p:318-330
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    More about this item

    Keywords

    Trade openness; determinants; transitional economies; Panel data.;
    All these keywords.

    JEL classification:

    • B17 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - International Trade and Finance
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies

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