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The Relationship Between Trade Openness And Economic Growth In The Neoclassical And Endogenous Growth Models

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  • Lidia Kabatliyska-Andonova

    (Faculty of Economics and Business Administration, Sofia University St Kliment Ohridski)

Abstract

This study examines the relationship between trade openness and economic growth within the frameworks of neoclassical and endogenous growth theories. It provides an overview of each theoretical perspective on the role of trade openness in fostering productivity gains, resource reallocation, technological diffusion, and innovation. In neoclassical models, trade openness is regarded as a determinant of total factor productivity, whereas endogenous growth models emphasise its contribution to research and development, human capital accumulation, and the stimulation of innovation. The main findings of empirical studies are synthesised, affirming the positive impact of trade liberalisation on long-term economic growth, particularly when accompanied by a conducive institutional environment and the implementation of effective policy measures. Although they describe different mechanisms through which this influence is exerted, both paradigms view trade openness as a key determinant of economic development.

Suggested Citation

  • Lidia Kabatliyska-Andonova, 2026. "The Relationship Between Trade Openness And Economic Growth In The Neoclassical And Endogenous Growth Models," Yearbook of the Faculty of Economics and Business Administration, Sofia University, Faculty of Economics and Business Administration, Sofia University St Kliment Ohridski - Bulgaria, vol. 25(1), pages 161-184, June.
    • Handle: RePEc:sko:yrbook:v:25:y:2026:i:1:p:161-184
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