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On the impact of trade openness on growth: further evidence from OECD countries

  • Atul Dar
  • Sal Amirkhalkhali
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    This study attempts to examine empirically the implications of the degree of openness for total and individual factor productivity growth in a group of 19 OECD countries over the last three decades. The study combines both time series and cross-sectional data. The model employed is a generalization of the commonly used, growth-accounting model based on the concept of an aggregate production function in which the rate of economic growth is a function of capital and labour accumulation and total factor productivity. It is explicitly assumed that total factor productivity depends, in turn, upon the rate of export expansion. The model is then estimated using the random coefficients approach. While results generally indicate that the relative importance of trade openness on economic growth varies significantly across countries, they also indicate that the role of capital and labour accumulation in fostering economic growth varies with the degree of openness, cross-sectionally as well as across time.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/0003684032000129020
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    Article provided by Taylor & Francis Journals in its journal Applied Economics.

    Volume (Year): 35 (2003)
    Issue (Month): 16 ()
    Pages: 1761-1766

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    Handle: RePEc:taf:applec:v:35:y:2003:i:16:p:1761-1766
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    1. Evans, David, 1989. "Alternative perspectives on trade and development," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 2, chapter 24, pages 1241-1304 Elsevier.
    2. Jeffrey A. Frankel & David Romer, 1996. "Trade and Growth: An Empirical Investigation," NBER Working Papers 5476, National Bureau of Economic Research, Inc.
    3. Alam, M Shahid, 1991. "Trade Orientation and Macroeconomic Performance in LDCs: An Empirical Study," Economic Development and Cultural Change, University of Chicago Press, vol. 39(4), pages 839-48, July.
    4. Pratt, John W. & Schlaifer, Robert, 1988. "On the interpretation and observation of laws," Journal of Econometrics, Elsevier, vol. 39(1-2), pages 23-52.
    5. Swamy, P A V B, 1970. "Efficient Inference in a Random Coefficient Regression Model," Econometrica, Econometric Society, vol. 38(2), pages 311-23, March.
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