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The Degree of Openness to Intra-Regional Trade - Towards Value-Added Based Openness Measures

Author

Listed:
  • Belke Ansgar

    () (Chair of International Economics, University of Hohenheim, D-70593 Stuttgart, Germany)

  • Wang Lars

    (Dir. oec. Department of Economics, University of Hohenheim, D-70593 Stuttgart, Germany)

Abstract

This study develops innovative measures of openness towards bilateral trade. The most widely applied openness indices are not able to accurately calculate the degree of trade openness. For example, the intra-regional export ratio which relates the value of exports of an integration area to the gross domestic product, can exceed 100 percent because trade is stated in gross terms, while the gross domestic product is expressed in value-added terms. This implies a negative value of domestic non-tradeables. The actual openness concept corrects the traditional concept by expressing trade in value-added terms instead of gross terms.

Suggested Citation

  • Belke Ansgar & Wang Lars, 2006. "The Degree of Openness to Intra-Regional Trade - Towards Value-Added Based Openness Measures," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 226(2), pages 115-138, April.
  • Handle: RePEc:jns:jbstat:v:226:y:2006:i:2:p:115-138
    as

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    References listed on IDEAS

    as
    1. Harrison, Ann, 1996. "Openness and growth: A time-series, cross-country analysis for developing countries," Journal of Development Economics, Elsevier, vol. 48(2), pages 419-447, March.
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    Cited by:

    1. Johnson, Robert C. & Noguera, Guillermo, 2012. "Accounting for intermediates: Production sharing and trade in value added," Journal of International Economics, Elsevier, vol. 86(2), pages 224-236.

    More about this item

    Keywords

    Degree of openness; openness to intra-regional trade; bilateral trade; value-added approach; input-output analysis;

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • F15 - International Economics - - Trade - - - Economic Integration
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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