IDEAS home Printed from https://ideas.repec.org/p/ags/ulefwp/250248.html
   My bibliography  Save this paper

Growth, Human Development, and Trade: The Asian Experience

Author

Listed:
  • Mustafa, Ghulam
  • Rizov, Marian
  • Kernohan, David

Abstract

This study looks at the three-way relationship between economic growth, human development, and openness to trade in a large panel of developing Asian economies. Using a theoretically motivated simultaneous equations system, we find that although human development contributes positively to economic growth, in the case of our Asian sample growth does not appear to have had a positive influence on human development. Uneven growth accompanied by lagging institutional development, preventing human capital formation, might have inhibited human development in the short to medium run. Complementary to the literature showing that growth is sustainable only when accompanied by human development, we confirm a role for trade liberalisation policies in achieving higher growth as well as human development.

Suggested Citation

  • Mustafa, Ghulam & Rizov, Marian & Kernohan, David, 2016. "Growth, Human Development, and Trade: The Asian Experience," Lincoln Economics and Finance Agecon Working Papers 250248, University of Lincoln, Lincoln International Business School.
    • Handle: RePEc:ags:ulefwp:250248
    DOI: 10.22004/ag.econ.250248
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/250248/files/OP_EG_and_HD_agecon.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.250248?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Sushanta K. Mallick, 2014. "Disentangling the Poverty Effects of Sectoral Output, Prices, and Policies in India," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(4), pages 773-801, December.
    2. Jeni Klugman & Francisco Rodríguez & Hyung-Jin Choi, 2011. "The HDI 2010: new controversies, old critiques," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(2), pages 249-288, June.
    3. Nathan Nunn, 2007. "Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(2), pages 569-600.
    4. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    5. Romain Wacziarg & Karen Horn Welch, 2008. "Trade Liberalization and Growth: New Evidence," The World Bank Economic Review, World Bank, vol. 22(2), pages 187-231, June.
    6. Neumayer, Eric & de Soysa, Indra, 2005. "Trade Openness, Foreign Direct Investment and Child Labor," World Development, Elsevier, vol. 33(1), pages 43-63, January.
    7. Falvey, Rod & Foster, Neil & Greenaway, David, 2012. "Trade Liberalization, Economic Crises, and Growth," World Development, Elsevier, vol. 40(11), pages 2177-2193.
    8. 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.
    9. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters, in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314, World Scientific Publishing Co. Pte. Ltd..
    10. Guido Tabellini, 2010. "Culture and Institutions: Economic Development in the Regions of Europe," Journal of the European Economic Association, European Economic Association, vol. 8(4), pages 677-716, June.
    11. Simon Guttmann & Anthony Richards, 2006. "Trade Openness: An Australian Perspective," Australian Economic Papers, Wiley Blackwell, vol. 45(3), pages 188-203, September.
    12. Dagdemir, Ozcan & Acaroglu, Hakan, 2010. "The effects of globalization on child labor in developing countries," Business and Economic Horizons (BEH), Prague Development Center (PRADEC), vol. 2(2), pages 1-12, July.
    13. Philippe Aghion, 2005. "Growth and Institutions," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 32(1), pages 3-18, March.
    14. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," The World Bank Economic Review, World Bank, vol. 10(3), pages 565-591, September.
    15. Wong Hock Tsen, 2006. "Granger causality tests among openness to international trade, human capital accumulation and economic growth in China: 1952-1999," International Economic Journal, Taylor & Francis Journals, vol. 20(3), pages 285-302.
    16. Wang, Yan & Yao, Yudong, 2003. "Sources of China's economic growth 1952-1999: incorporating human capital accumulation," China Economic Review, Elsevier, vol. 14(1), pages 32-52.
    17. Uwe Sunde & Thomas Vischer, 2015. "Human Capital and Growth: Specification Matters," Economica, London School of Economics and Political Science, vol. 82(326), pages 368-390, April.
    18. Barbara Sianesi & John Van Reenen, 2003. "The Returns to Education: Macroeconomics," Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 157-200, April.
    19. Daron Acemoglu & Simon Johnson & James A. Robinson & Pierre Yared, 2008. "Income and Democracy," American Economic Review, American Economic Association, vol. 98(3), pages 808-842, June.
    20. Ioannis Bournakis, 2012. "Sources of TFP growth in a framework of convergence-evidence from Greece," International Review of Applied Economics, Taylor & Francis Journals, vol. 26(1), pages 47-72, January.
    21. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    22. Suri, Tavneet & Boozer, Michael A. & Ranis, Gustav & Stewart, Frances, 2011. "Paths to Success: The Relationship Between Human Development and Economic Growth," World Development, Elsevier, vol. 39(4), pages 506-522, April.
    23. Daniel Cohen & Marcelo Soto, 2007. "Growth and human capital: good data, good results," Journal of Economic Growth, Springer, vol. 12(1), pages 51-76, March.
    24. Michael Binder & Georgios Georgiadis, 2011. "Determinants of Human Development: Capturing the Role of Institutions," CESifo Working Paper Series 3397, CESifo.
    25. Cameron, Gavin & Proudman, James & Redding, Stephen, 2005. "Technological convergence, R&D, trade and productivity growth," European Economic Review, Elsevier, vol. 49(3), pages 775-807, April.
    26. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
    27. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472, Elsevier.
    28. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    29. Ranis, Gustav & Stewart, Frances & Ramirez, Alejandro, 2000. "Economic Growth and Human Development," World Development, Elsevier, vol. 28(2), pages 197-219, February.
    30. Sudhir Anand and Amartya Sen, 1994. "Human development Index: Methodology and Measurement," Human Development Occasional Papers (1992-2007) HDOCPA-1994-02, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    31. Mason, Geoff & O'Leary, Brigid & Vecchi, Michela, 2012. "Certified and uncertified skills and productivity growth performance: Cross-country evidence at industry level," Labour Economics, Elsevier, vol. 19(3), pages 351-360.
    32. Qadri, Faisal Sultan & Waheed, Abdul, 2014. "Human capital and economic growth: A macroeconomic model for Pakistan," Economic Modelling, Elsevier, vol. 42(C), pages 66-76.
    33. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," The World Bank Economic Review, World Bank, vol. 10(3), pages 565-591, September.
    34. Sudhir Anand & Amartya Sen, 2000. "The Income Component of the Human Development Index," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 1(1), pages 83-106.
    35. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    36. Sudhir Anand and Amartya Sen, 2000. "The Income Component of Human Development Index," Human Development Occasional Papers (1992-2007) HDOCPA-2000-01, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    37. Archanun Kohpaiboon, 2003. "Foreign trade regimes and the FDI-Growth Nexus: a case study of Thailand," Journal of Development Studies, Taylor & Francis Journals, vol. 40(2), pages 55-69.
    38. Axel Dreher, 2006. "Does globalization affect growth? Evidence from a new index of globalization," Applied Economics, Taylor & Francis Journals, vol. 38(10), pages 1091-1110.
    39. Greenaway, David & Morgan, Wyn & Wright, Peter, 2002. "Trade liberalisation and growth in developing countries," Journal of Development Economics, Elsevier, vol. 67(1), pages 229-244, February.
    40. World Bank, 2012. "World Development Indicators 2012," World Bank Publications - Books, The World Bank Group, number 6014, August.
    41. Ozcan Dagdemir & Hakan Acaroglu, 2010. "The effects of globalization on child labor in developing countries," Business and Economic Horizons (BEH), Prague Development Center, vol. 2(2), pages 37-47, July.
    42. Manuel Agosin & Roberto Machado, 2007. "Openness and the International allocation of foreign direct investment," Journal of Development Studies, Taylor & Francis Journals, vol. 43(7), pages 1234-1247.
    43. Lorenz Blume & Stefan Voigt, 2007. "The Economic Effects of Human Rights," Kyklos, Wiley Blackwell, vol. 60(4), pages 509-538, November.
    44. Roberto Rigobon & Dani Rodrik, 2005. "Rule of law, democracy, openness, and income," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(3), pages 533-564, July.
    45. Arusha Cooray & Sushanta Mallick & Nabamita Dutta, 2014. "Gender-specific Human Capital, Openness and Growth: Exploring the Linkages for South Asia," Review of Development Economics, Wiley Blackwell, vol. 18(1), pages 107-122, February.
    46. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    47. Chengang Wang & Xiaming Liu & Yingqi Wei, 2004. "Impact of Openness on Growth in Different Country Groups," The World Economy, Wiley Blackwell, vol. 27(4), pages 567-585, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    2. Grundmann, Rainer & Gries, Thomas, 2015. "Crucial for Modern Sector Development? The Role of Exports and Institutions in Developing Countries," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112962, Verein für Socialpolitik / German Economic Association.
    3. Docquier, Frédéric & Lodigiani, Elisabetta & Rapoport, Hillel & Schiff, Maurice, 2016. "Emigration and democracy," Journal of Development Economics, Elsevier, vol. 120(C), pages 209-223.
    4. Lenkei, Balint & Mustafa, Ghulam & Vecchi, Michela, 2018. "Growth in emerging economies: Is there a role for education?," Economic Modelling, Elsevier, vol. 73(C), pages 240-253.
    5. Kotschy, Rainer & Sunde, Uwe, 2017. "Democracy, inequality, and institutional quality," European Economic Review, Elsevier, vol. 91(C), pages 209-228.
    6. Rao, B. Bhaskara & Vadlamannati, Krishna Chaitanya, 2011. "Globalization and growth in the low income African countries with the extreme bounds analysis," Economic Modelling, Elsevier, vol. 28(3), pages 795-805, May.
    7. Eftimoski, Dimitar, 2022. "On the inconclusive effect of human capital on growth: A new look at extended specifications," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 708-727.
    8. Glawe, Linda & Wagner, Helmut, 2022. "Is schooling the same as learning? – The impact of the learning-adjusted years of schooling on growth in a dynamic panel data framework," World Development, Elsevier, vol. 151(C).
    9. Romain Bouis & Romain Duval & Fabrice Murtin, 2011. "The Policy and Institutional Drivers of Economic Growth Across OECD and Non-OECD Economies: New Evidence from Growth Regressions," OECD Economics Department Working Papers 843, OECD Publishing.
    10. Ulaşan, Bülent, 2012. "Cross-country growth empirics and model uncertainty: An overview," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 6, pages 1-69.
    11. Gharsallah, Mariem & Trabelsi, Salwa, 2024. "The effect of human capital on the trade-growth nexus: A dynamic panel threshold analysis," Research in Economics, Elsevier, vol. 78(4).
    12. Benos, Nikos & Zotou, Stefania, 2014. "Education and Economic Growth: A Meta-Regression Analysis," World Development, Elsevier, vol. 64(C), pages 669-689.
    13. Sumbal Fatima & Bateer Chen & Muhammad Ramzan & Qamar Abbas, 2020. "The Nexus Between Trade Openness and GDP Growth: Analyzing the Role of Human Capital Accumulation," SAGE Open, , vol. 10(4), pages 21582440209, November.
    14. Teixeira, Aurora A.C. & Queirós, Anabela S.S., 2016. "Economic growth, human capital and structural change: A dynamic panel data analysis," Research Policy, Elsevier, vol. 45(8), pages 1636-1648.
    15. Bahar Bayraktar-Sağlam, 2016. "The Stages of Human Capital and Economic Growth: Does the Direction of Causality Matter for the Rich and the Poor?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(1), pages 243-302, May.
    16. Ho Thuy Ai & Ping, Lin, 2018. "Impacts of fiscal policy on economic growth: Another look from institutional perspective," Economics Discussion Papers 2018-45, Kiel Institute for the World Economy (IfW Kiel).
    17. Cheikh Tidiane Ndiaye & Armand Akomavo Dagoudo & Babacar Mbengue, 2021. "Growth and Income Distribution Inequalities in Sub-Saharan Africa: A Dynamic Model Approach [Croissance et inégalités de distribution des revenus en Afrique subsaharienne : une approche par les mod," Working Papers hal-03202484, HAL.
    18. Bloom, David E. & Canning, David & Kotschy, Rainer & Prettner, Klaus & Schünemann, Johannes, 2024. "Health and economic growth: Reconciling the micro and macro evidence," World Development, Elsevier, vol. 178(C).
    19. Petra Sauer & Martin Zagler, 2014. "(In)equality in Education and Economic Development," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S2), pages 353-379, November.
    20. Emanuele Felice, 2012. "Regional convergence in Italy, 1891–2001: testing human and social capital," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 6(3), pages 267-306, October.

    More about this item

    Keywords

    International Development;

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ulefwp:250248. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/leulhuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.