Trade Openness and Growth: Is There Any Link?

Sarkar, Prabirjit (2007): Trade Openness and Growth: Is There Any Link?

Abstract

The present study examines the relationship between openness (trade-GDP ratio) and growth. Our cross-country panel data analysis of a sample 51 countries of the South during 1981-2002 shows that for only 11 rich and highly trade-dependent countries a higher real growth is associated with a higher trade share. Time series study of individual country experiences shows that the majority of the countries covered in the sample including the East Asian countries experienced no positive long-term relationship between openness and growth during 1961-2002. Our study of the experience of various regions and groups shows that only the Middle Income group exhibited a positive long-term relationship.

• Item Type: MPRA Paper
• Language: English
• Keywords: growth; opening up; liberalization; less developed countries and globalization
• Subjects: F - International Economics > F0 - General > F02 - International Economic Order and Integration; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O50 - General