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The Commutative Effect and Casuality of Openness and Indigenous Factors Among World Economies

Author

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  • Li, Kui-Wai
  • Zhou, Xianbo

Abstract

The paper studies the commutative and causality relationship between economic openness and indigenous factors. The construction of the Openness Index and the Indigenous Index provides a measure on the extent of openness and indigenous development among world economies. The two indices are used to study their commutative effect and causality. The empirical findings show that there is a positive and significant static effect of openness on indigenous factors and vice versa; however the latter is larger. There are bi-directional dynamic causality relationships between openness and indigenous factors. Indigenous factors help to forecast openness factors and vice versa.

Suggested Citation

  • Li, Kui-Wai & Zhou, Xianbo, 2008. "The Commutative Effect and Casuality of Openness and Indigenous Factors Among World Economies," MPRA Paper 35298, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:35298
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    File URL: https://mpra.ub.uni-muenchen.de/35298/1/MPRA_paper_35298.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Openness; indigeneity; panel data model; commutative effect; causality;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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