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Openness and growth in Fiji: some time series evidence

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  • B. Bhaskara Rao
  • Maheshwar Rao

Abstract

Compared to many cross-country studies on the determinants of growth rate, time series works are relatively few and limited in scope. However, time series studies are useful for country-specific policies. But in many recent works ad hoc specifications have been used to analyse the contribution of various factors to growth. This article uses an improved specification to estimate the effects of openness on growth in a small open economy namely Fiji. In addition to trade openness, we include, as additional variables, the basic conditioning variables namely factor inputs into our specification. The need for the inclusion of some basic conditioning variables has been emphasized by Boswoth and Collins (2003) in their cross country studies. Our results show that trade openness and output are cointegrated. Neglecting the conditioning variables seems to lead to some overestimation of the effects of openness and at times a cointegrating vector may not exist.

Suggested Citation

  • B. Bhaskara Rao & Maheshwar Rao, 2009. "Openness and growth in Fiji: some time series evidence," Applied Economics, Taylor & Francis Journals, vol. 41(13), pages 1653-1662.
  • Handle: RePEc:taf:applec:v:41:y:2009:i:13:p:1653-1662 DOI: 10.1080/00036840601007252
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    References listed on IDEAS

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    Cited by:

    1. Kumar, Saten & Pacheco, Gail & Rossouw, Stephanie, 2010. "How to Increase the Growth Rate in South Africa?," MPRA Paper 26105, University Library of Munich, Germany.
    2. Shahbaz, Muhammad, 2012. "Does trade openness affect long run growth? Cointegration, causality and forecast error variance decomposition tests for Pakistan," Economic Modelling, Elsevier, vol. 29(6), pages 2325-2339.
    3. Saten Kumar & Gail Pacheco, 2010. "What Determines the Long run Growth in Kenya?," EERI Research Paper Series EERI_RP_2010_16, Economics and Econometrics Research Institute (EERI), Brussels.
    4. Kumar, Saten & Pacheco, Gail, 2012. "What determines the long run growth rate in Kenya?," Journal of Policy Modeling, Elsevier, vol. 34(5), pages 705-718.
    5. Bianka Dettmer, 2012. "Business services outsourcing and economic growth: Evidence from a dynamic panel data approach," Jena Economic Research Papers 2012-049, Friedrich-Schiller-University Jena.
    6. E. Tsanana & X. Chapsa & C. Katrakilidis, 2016. "Is growth corrupted or bureaucratic? Panel evidence from the enlarged EU," Applied Economics, Taylor & Francis Journals, vol. 48(33), pages 3131-3147, July.

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