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Trade Openness and Growth: Pursuing Empirical Glasnost

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  • Andreas Billmeier
  • Tommaso Nannicini

Abstract

Studies of the impact of trade openness on growth are based either on cross-country analysis—which lacks transparency—or case studies—which lack statistical rigor. This paper applies a transparent econometric method drawn from the treatment evaluation literature (matching estimators) to make the comparison between treated (that is, open) and control (that is, closed) countries explicit while remaining within a statistical framework. Matching estimators highlight that common cross-country evidence is based on rather far-fetched country comparisons, which stem from the lack of common support of treated and control countries in the covariate space. The paper therefore advocates paying more attention to appropriate sample restriction in cross-country macro research. IMF Staff Papers (2009) 56, 447–475. doi:10.1057/imfsp.2008.39; published online 3 March 2009

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Article provided by Palgrave Macmillan in its journal IMF Staff Papers.

Volume (Year): 56 (2009)
Issue (Month): 3 (August)
Pages: 447-475

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Handle: RePEc:pal:imfstp:v:56:y:2009:i:3:p:447-475
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  1. Francesco Giavazzi & Guido Tabellini, 2004. "Economic and Political Liberalizations," NBER Working Papers 10657, National Bureau of Economic Research, Inc.
  2. Sebastian Edwards & I. Igal Magendzo, 2003. "Dollarization and economic performance: What do we really know?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 8(4), pages 351-363.
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  16. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
  17. Ruben Atoyan & Patrick Conway, 2006. "Evaluating the impact of IMF programs: A comparison of matching and instrumental-variable estimators," The Review of International Organizations, Springer, vol. 1(2), pages 99-124, June.
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Cited by:

  1. Basarab Gogoneaţă, 2010. "The Long-Run Relationship Between Commerce And Sustainable Development In Baltic And Central And Eastern European Countries," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 12(27), pages 36-51, February.
  2. Jang, Tae-Seok & Okano, Eiji, 2013. "Productivity shocks and monetary policy in a two-country model," Dynare Working Papers 29, CEPREMAP.
  3. Tommaso Nannicini & Roberto Ricciuti, 2010. "Autocratic Transitions and Growth," CESifo Working Paper Series 2967, CESifo Group Munich.
  4. De Lombaerde, Philippe A.A., 2009. "On the dynamic measurement of economic openness," Journal of Policy Modeling, Elsevier, vol. 31(5), pages 731-736, September.
  5. Paolo Pinotti, 2012. "The Economic Costs of Organized Crime: Evidence from Southern Italy," Working Papers 054, "Carlo F. Dondena" Centre for Research on Social Dynamics (DONDENA), Università Commerciale Luigi Bocconi.
  6. World Bank, 2009. "Macedonia - Moving to Faster and More Inclusive Growth A Country Economic Memorandum : Main Report and Annex," World Bank Other Operational Studies 3067, The World Bank.
  7. Michael Funke & Marc Gronwald, 2009. "A Convex Hull Approach to Counterfactual Analysis of Trade Openness and Growth," Quantitative Macroeconomics Working Papers 20906, Hamburg University, Department of Economics.
  8. Wolf-Heimo Grieben & Fuat Sener, 2012. "North-South Trade, Unemployment and Growth: What’s the Role of Labor Unions?," Working Paper Series of the Department of Economics, University of Konstanz 2012-06, Department of Economics, University of Konstanz.
  9. Amr Hosny, 2012. "Algeria’s Trade with GAFTA Countries: A Synthetic Control Approach," Transition Studies Review, Springer, vol. 19(1), pages 35-42, September.
  10. Lee, Jim, 2011. "Export specialization and economic growth around the world," Economic Systems, Elsevier, vol. 35(1), pages 45-63, March.
  11. Gilles Dufrénot & Valérie Mignon & Charalambos Tsangarides, 2009. "The Trade-Growth Nexus in the Developing Countries: a Quantile Regression Approach," Working Papers 2009-04, CEPII research center.
  12. Raphael Espinoza, 2012. "Factor Accumulation and the Determinants of TFP in the GCC," OxCarre Working Papers 094, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.

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