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Trade and economic growth: A re-examination of the empirical evidence

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  • Busse, Matthias
  • Königer, Jens

Abstract

While trade integration is often regarded as a principal determinant of economic growth, the empirical evidence for a causal linkage between trade and growth is ambiguous. This paper argues that the effect of trade in dynamic panel estimations depends crucially on the specification of trade. Both from a theoretical as well as an empirical point of view one specification is preferred: the volume of exports and imports as a share of lagged total GDP. For this trade measure, a positive and highly significant impact on economic growth can be found.

Suggested Citation

  • Busse, Matthias & Königer, Jens, 2012. "Trade and economic growth: A re-examination of the empirical evidence," HWWI Research Papers 123, Hamburg Institute of International Economics (HWWI).
  • Handle: RePEc:zbw:hwwirp:123
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    References listed on IDEAS

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    Cited by:

    1. repec:tou:journl:v:45:y:2017:p:99-112 is not listed on IDEAS
    2. Silberberger, Magdalene & Königer, Jens, 2016. "Regulation, trade and economic growth," Economic Systems, Elsevier, vol. 40(2), pages 308-322.
    3. Dinkneh Gebre Borojo & Yushi Jiang, 2016. "The Impact of Africa-China Trade Openness on Technology Transfer and Economic Growth for Africa: A Dynamic Panel Data Approach," Annals of Economics and Finance, Society for AEF, vol. 17(2), pages 403-431, November.
    4. repec:dug:journl:y:2016:i:2:p:7-16 is not listed on IDEAS
    5. repec:mth:ber888:v:7:y:2017:i:2:p:270-281 is not listed on IDEAS
    6. repec:eee:wdevel:v:102:y:2018:i:c:p:243-261 is not listed on IDEAS
    7. Enrico D'Elia & Roberta De Santis, 2018. "Growth divergence and income inequality in OECD countries:the role of trade and financial openness," Working Papers LuissLab 18140, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    8. repec:eee:enepol:v:115:y:2018:i:c:p:443-455 is not listed on IDEAS

    More about this item

    Keywords

    Openness; Trade; Growth;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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