Openness of the economy vs economic growth: case of Slovakia

The Slovak Republic is a small, open country in the center of Europe. Since the 1990s, Slovakia has faced different challenges, including market structure changes, attracting foreign investors, and building international relations with European states. After 1993, when Slovakia became independent and started its path to the free market economy, the country showed rapid economic growth, with increased population income, overall employment, and gross domestic product (GDP). These changes have emerged with a drastic increase in Slovakia's international trade, as the country started to open its trade to foreign investors and international relations, especially with the European Union members. In the study, we aim to identify if the growth of the coefficient of openness of the Slovak economy led to the development of the country's economy. For the study, two variables were used: annual economic growth expressed in GDP and the coefficient of the openness of the economy (ratio of export and import on GDP). The study's results help us understand if a high level of participation in international trade (including participation in global value chains) helped Slovakia become a highly developed country and increase its economic and social growth. The Slovak Republic's development into a highly developed economy can be an exemplar for less developed economies with similar baseline conditions that can serve as a probable contribution to the study.