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International trade and endogenous growth: the case of Czech economy

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  • Marcel Ševela

    (Ústav ekonomie, Mendelova univerzita v Brně, Zemědělská 1, 613 00 Brno, Česká republika)

Abstract

The paper is focuses on testing of the presence of increasing returns to scale in the Czech economy production function that is constructed upon Solow growth accounting formula. The growth relation is adapted for imperfect competition in the goods market. In the second step the spillover effect to total factor productivity is tested based on import openness of the economy and share of productive equipment imports to gross domestic product. Using data on Czech economy in years 1993-2009 for OLS estimates, the presence of increasing returns to scale was proved in all tested models, the obtained returns to scale parameter is about 2. Explained variability is relatively poor for the full data sample, limiting the data range to 1999-2009 the model is able explain almost 57 %. Tests for spillover effect modeled through import shares do not bring evidence about appropriate significance, the common test of OLS approach indicated very low contribution for import variables in both versions.

Suggested Citation

  • Marcel Ševela, 2011. "International trade and endogenous growth: the case of Czech economy," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 59(2), pages 333-338.
    • Handle: RePEc:mup:actaun:actaun_2011059020333
    DOI: 10.11118/actaun201159020333
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    References listed on IDEAS

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    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    2. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May.
    3. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    4. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    5. Paul M. Romer, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter.
    6. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Cited by:

    1. Naďa Birčiaková & Jana Stávková & Martin Souček, 2014. "How Marketing Instruments Affect Consumer Behavior in Times of Economic Turbulence," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 62(6), pages 1257-1263.

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