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Openness and economic growth in developing countries

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  • Gundlach, Erich

Abstract

Openness appears to have a strong impact on economic growth especially in DCs, which typically exhibit a high share of physical capital in factor income and a low share of labor. In the neoclassical growth model with partial capital mobility, physical capital's share in factor income determines the difference in the predicted convergence rates for open and closed economies. With a 60 percent share as in developing countries, the convergence rates should differ by a factor of about 2.5. My regression results for a sample of open and closed DCs roughly confirm this hypothesis.

Suggested Citation

  • Gundlach, Erich, 1996. "Openness and economic growth in developing countries," Kiel Working Papers 749, Kiel Institute for the World Economy (IfW).
  • Handle: RePEc:zbw:ifwkwp:749
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    Cited by:

    1. Martin Raiser, 1998. "Subsidising inequality: Economic reforms, fiscal transfers and convergence across Chinese provinces," Journal of Development Studies, Taylor & Francis Journals, vol. 34(3), pages 1-26.
    2. Rousska Dimova, 2002. "Theoretical Issues of Economic Globalization," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 44-66.
    3. Nunnenkamp, Peter, 1998. "Lateinamerika nach der verlorenen Dekade: Eine Zwischenbilanz der Reformen," Kiel Discussion Papers 324, Kiel Institute for the World Economy (IfW).
    4. Hossain, A., 2006. "Sources of Economic Growth in Indonesia, 1966-2003," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 6(2).
    5. Ivan Stoykov, 2005. "Investments and Economic Growth Based on Endogenous Factors," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 30-41.
    6. Luke Willard, 2000. "Does Openness Promote Growth?," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 7(3), pages 251-261.
    7. Litwin, Carol, 1998. "Trade and Income Distribution in Developing Countries," Working Papers in Economics 9, University of Gothenburg, Department of Economics.
    8. Kaplan, Muhittin & Aslan, Alper, 2006. "Türki̇ye’Ni̇n Dişa Açilma Oraninin Ölçümü, 1965-1995," MPRA Paper 10603, University Library of Munich, Germany.
    9. Nunnenkamp, Peter, 1998. "Boom and bust in capital flows to developing countries: what South Asia can learn from recent financial crises," Kiel Working Papers 853, Kiel Institute for the World Economy (IfW).
    10. Erich Gundlach, 1997. "Human capital and economic development: A macroeconomic assessment," Intereconomics: Review of European Economic Policy, Springer;German National Library of Economics;Centre for European Policy Studies (CEPS), vol. 32(1), pages 23-35, January.
    11. Vu, K.M., 2013. "A note on interpreting the beta-convergence effect," Economics Letters, Elsevier, vol. 118(1), pages 46-49.
    12. Nunnenkamp, Peter, 2000. "Boom, bust, recovery – What next in private capital flows to emerging markets?," Kiel Discussion Papers 362, Kiel Institute for the World Economy (IfW).
    13. Thomas Bassetti & Donata Favaro, 2011. "A Growth Model with Gender Inequality in Employment, Human Capital, and Socio-Political Participation," CHILD Working Papers wp14_11, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.

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    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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