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Openness and Growth in Central-Eastern European Countries

  • Rosa Capolupo

    (Dipartimento di Scienze Economiche)

  • Giuseppe Celi

    (Dipartimento di Scienze Economiche)

We present evidence of the relationship between trade-openness and growth in the sample of former communist countries before and after the transition from a central planned economy (CPE) to a market economy by applying standard OLS and panel estimation techniques. The main finding is that during the transition the importance of openness on growth per capita has increased sharply by changing the coefficient from a negative sign to a positive and significant one. The result seems to be robust to (i) estimation methods , (ii) different measures of openness adopted and (iii)consistent with the integration view, which states that a higher degree of trade openness spurred by market incentives and comparative advantages enhances the per capita growth rate of economies.

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Paper provided by EconWPA in its series GE, Growth, Math methods with number 0506002.

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Length: 28 pages
Date of creation: 06 Jun 2005
Date of revision:
Handle: RePEc:wpa:wuwpge:0506002
Note: Type of Document - pdf; pages: 28
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