Trade Openness and Growth: Is There Any Link?
39 Pages Posted: 18 Dec 2006
Date Written: October 10, 2006
The present study examines the relationship between openness (trade-GDP ratio) and growth. Our cross-country and panel regression analysis of World Bank data for 51 less-developed countries (LDCs) during shows that for only 11 rich and highly trade-dependent LDCs a higher real growth is associated with a higher trade share. Time series study of individual country experiences shows that the majority of LDCs including the East Asian countries experienced no positive long-term relationship between openness and growth during . Our study of the experience of various regions and groups shows that only the Middle Income group exhibited a positive long-term relationship.
Keywords: growth, opening up, liberalization, less developed countries and globalization
JEL Classification: F43, F02, O40, O50
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