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Trade Liberalization, Economic Growth and Convergence: Evidence From East Asian Economies

Author

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  • Zhang, Zhaoyong

    () (National University of Singapore)

Abstract

In recent years most studies analyzing cross-country convergence have ignored the role of international trade, simply framing the analysis in a Solow world. These models then have very limited power in explaining the economic growth of East Asia, given that East Asian integration is largely due to the market-driven forces, trade induced by foreign direct investment (FDI). This paper investigates the interrelationship between regional integration and economic convergence by linking income convergence to intra-regional trade and FDI. A central focus of the model is on how the degree of market integration driven through trade and FDI interacts with income convergence among the East Asian countries during the period 1960-1996. We shed light on the significance of trade openness, liberalization and regional integration in contributing to cross-country income convergence.

Suggested Citation

  • Zhang, Zhaoyong, 2001. "Trade Liberalization, Economic Growth and Convergence: Evidence From East Asian Economies," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 16, pages 147-164.
  • Handle: RePEc:ris:integr:0158
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    References listed on IDEAS

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    1. Sachs, Jeffrey D, 1996. "Economic Transition and the Exchange-Rate Regime," American Economic Review, American Economic Association, vol. 86(2), pages 147-152, May.
    2. Jeffrey A. Frankel, 1999. "No Single Currency Regime is Right for All Countries or At All Times," NBER Working Papers 7338, National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Wei, Kailei & Yao, Shujie & Liu, Aying, 2008. "Foreign Direct Investment and Regional Inequality in China," WIDER Working Paper Series 094, World Institute for Development Economic Research (UNU-WIDER).
    2. Zhang, Zhaoyong, 2003. "Can the rest of East Asia catch up with Japan: some empirical evidence," Japan and the World Economy, Elsevier, vol. 15(1), pages 91-110, January.
    3. Roberta Capello & Ugo Fratesi, 2010. "Globalization and a dual Europe: future alternative growth trajectories," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 45(3), pages 633-665, December.
    4. Sebastian-Andrei LABES, 2015. "Fdi Determinants In Brics," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 7(2), pages 296-308, August.
    5. Kailei Wei & Shujie Yao & Aying Liu, "undated". "Foreign direct investment and regional inequality in China," Discussion Papers 07/32, University of Nottingham, GEP.

    More about this item

    Keywords

    Trade liberalizon; Growth; FDI;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration

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