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Trade Openness and Growth: Is There Any Link?

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  • Prabirjit Sarkar

Abstract

The present study examines the relationship between openness (tradeGDP ratio) and growth. Our cross-country panel data analysis of a sample 51 less developed countries shows that for only 11 rich and highly trade-dependent countries a higher real growth is associated with a higher trade share. Time series study of individual country experiences shows that the majority of the countries covered in the sample including the East Asian countries experienced no positive long-term relationship between openness and growth during the 1961-2002 time period. Our study of the experience of various regions and groups shows that only the Middle Income group exhibited a positive long-term relationship.

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  • Prabirjit Sarkar, 2008. "Trade Openness and Growth: Is There Any Link?," Journal of Economic Issues, Taylor & Francis Journals, vol. 42(3), pages 763-785, September.
  • Handle: RePEc:mes:jeciss:v:42:y:2008:i:3:p:763-785
    DOI: 10.1080/00213624.2008.11507178
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    3. Awad. T., 2012. "Trade Liberalization Policy And Growth By Sector: Is It Working For Jordan?," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 12(2).
    4. Yanqing Jiang, 2016. "Trade integration and regional inequality: a theoretical framework with empirical implications for China," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 14(4), pages 365-384, October.
    5. Shaukat, Badiea & Zhu, Qigui & Khan, M. Ijaz, 2019. "Real interest rate and economic growth: A statistical exploration for transitory economies," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 534(C).
    6. Jiang, Yanqing, 2011. "Understanding openness and productivity growth in China: An empirical study of the Chinese provinces," China Economic Review, Elsevier, vol. 22(3), pages 290-298, September.
    7. CHIKHURi, Krishna, 2014. "Agricultural Trade Liberalization and Economic Growth: Is there a connection in Sub-Saharan Africa?," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 14(1), pages 161-174.
    8. Cosmas S. Mbogela, 2019. "An Empirical Examination on Trade Openness and Economic Growth Nexus in Africa," Asian Journal of Economics and Empirical Research, Asian Online Journal Publishing Group, vol. 6(1), pages 1-15.
    9. Jianing Hou & Shih-Chih Chen & De Xiao, 2018. "Measuring the Benefits of the “One Belt, One Road” Initiative for Manufacturing Industries in China," Sustainability, MDPI, Open Access Journal, vol. 10(12), pages 1-16, December.
    10. Chandran, V.G.R. & Munusamy, 2009. "Trade openness and manufacturing growth in Malaysia," Journal of Policy Modeling, Elsevier, vol. 31(5), pages 637-647, September.
    11. İsmail Durak Author-Name:Ergün Eroğlu, 2019. "The Nexus of Economic Growth, Trade Openness and Banking Sector Depth In OIC: An Application of Panel Data Analysis," Alphanumeric Journal, Bahadir Fatih Yildirim, vol. 7(2), pages 205-238, December.
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    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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