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The Impact of Government Trade Liberalization Policy on the Economic Complexity of Developing Countries

Author

Listed:
  • Sepehrdoust, Hamid

    (Associate Professor in Economics, Department of Economics, Bu-Ali-Sina University, Hamedan, Iran)

  • Setarehie, Maryam

    (Ph.D Student in Economics, Faculty of Economics and Social Sciences, Bu-Ali Sina University, Hamadan, Iran)

  • Davarikish, Razieh

    (Ph.D Student in Economics, Faculty of Economics and Social Sciences, Bu-Ali Sina University, Hamadan, Iran)

Abstract

The purpose of this study was to investigate the impact of government trade liberalization on the economic complexity of eight developing economies named Group D8 member countries during the period 2002-2017; using the PVAR method. immediate reaction test results show that, over a period of 10 years, economic complexity increases with positive shock from variables of trade freedom, foreign direct investment and gross fixed capital formation, but in the long run, the effect of imports of intermediary and capital goods is initially increasing and, after a short period, has a positive downward effect. The results of the analysis of variance also show, the variables of economic complexity, import of intermediate and capital goods, gross fixed capital formation, trade freedom and foreign direct investment respectively have the most impact on economic complexity, respectively

Suggested Citation

  • Sepehrdoust, Hamid & Setarehie, Maryam & Davarikish, Razieh, 2020. "The Impact of Government Trade Liberalization Policy on the Economic Complexity of Developing Countries," Quarterly Journal of Applied Theories of Economics, Faculty of Economics, Management and Business, University of Tabriz, vol. 7(1), pages 211-238, May.
    • Handle: RePEc:ris:qjatoe:0183
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    More about this item

    Keywords

    trade liberalization; economic complexity; developing countries (D8); PVAR;
    All these keywords.

    JEL classification:

    • A20 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - General
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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