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Development Level, Trade and Economic Growth: Comparative Evidence from the More De¬veloped Countries


  • Fosu, Augustin Kwasi

    () (World Institute for Development Economic Research (UNU/WIDER) United Nations University)


Numerous studies have uncovered a positive independent impact of trade on economie growth in less-developed countries (LDCs). The present paper examines the implications of development level for the benefits of trade by comparatively examining the empirical evidence for the more developed, industrialized market, countries (MDCs). The paper is motivated by the hypothesis that MDCs provide a more efficient institutional framework than LDCs for transmitting the incentives for growth induced by exports. Hence these countries may actually derive relatively large benefits from trade. Employing the usual export-augmented production function that incorporates labor, capital formation, and exports, an inter-country GDP growth over the 1960-1986 period is analyzed for the nineteen MDCs and, comparatively, for 64 LDCs. While exports are found to exert a positive independent influence on economie growth in MDCs as well as in LDCs, the paper further finds that the importance of trade for economie performance rnay be even greater for MDCs.

Suggested Citation

  • Fosu, Augustin Kwasi, 1996. "Development Level, Trade and Economic Growth: Comparative Evidence from the More De¬veloped Countries," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 49(2), pages 221-234.
  • Handle: RePEc:ris:ecoint:0374

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