Exports, Terms of Trade and Economic Growth: Evidence from Countries with Different Level of Openness
DOI:
https://doi.org/10.6000/1929-7092.2019.08.28Keywords:
Economic growth, degree of openness, developed level.Abstract
This paper explores the effects of the ratio exports/GDP and the terms of trade on growth among countries with different level of development and openness. These effects vary among subgroups of countries with different openness and per development level. Nonetheless, in general the evidence seems to support the hypothesis stated in this research. In less developed or better endowed for export countries one or both of the explanatory variables mentioned above encourage for economic growth. Specifically, in advanced economies only the ratio exports/GDP is growth promoting when these are open, and have high per capita but small global GDP and/or relative advantages to be growth export-led. In turn, exports or and the terms of trade trends to promote growth in lower middle income countries. Unfortunately, the surprising results came from the poorest countries. They do not are benefited from a more favourable foreign environment. On the contrary, exports are not significant while an improvement in the terms of trade diminishes their growth.
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Wang, Chengang (2003): Openness and economic growth, Doctoral Thesis, Aston University.
Yanikkaya, Halit (2003): Trade openness and economic growth: a cross-country empirical investigation, Journal of Development Economics, 72 (1), 57-89.
https://doi.org/10.1016/S0304-3878(03)00068-3
Zahonogo, Pam (2018): Globalization and economic growth in developing countries: evidence from Sub-Saharan Africa, The International Trade Journal, 32 (2), 189-208.
https://doi.org/10.1080/08853908.2017.1333933
https://doi.org/10.1016/j.jdeveco.2009.01.008
Awokuse, Titus (2008): Trade openness and economic growth: is growth export-led or import-led? Applied Economics, 40 (2), 161-173.
https://doi.org/10.1080/00036840600749490
Bakari, Sayef and Makram Krit (2017): The nexus between exports, imports and economic growth: Evidence from Mauritania, International Journal of Economics and Empirical Research, 5 (1), 10-17.
Brueckner, Markus and Daniel Lederman (2015): Trade openness and economic growth: Panel data evidence from Sub-Saharan Africa, Economica, 82 (1), 1302-1323.
https://doi.org/10.1111/ecca.12160
Chen, Baizhu and Yi Feng (2000): Determinants of economic growth in China: Private enterprise, education, and openness, China Economic Review, 11 (1), 1-15.
https://doi.org/10.1016/S1043-951X(99)00014-0
Dao, Anh Tung (2014): Trade openness and economic growth, Illinois Wesleyan University Economics Department Working Papers.
De Gregorio, José and Lee Jong-Wha (1999): Economic Growth in Latin America: Sources and Prospects, Documento de trab-ajo 66, Centro de Economía Aplicada, Universidad de Chile.
Delbianco, Fernando, Dabús Carlos and María Ángeles Caraballo Pou (2014): Income Inequality and Economic Growth: new Evidence from Latin America, Cuadernos de Economía, 33 (63), 381-398.
https://doi.org/10.15446/cuad.econ.v33n63.45338
Edwards, Sebastian (1992): Trade orientation, distortions and growth in developing countries, Journal of Development Economics, 39 (1), 31-57.
https://doi.org/10.1016/0304-3878(92)90056-F
Edwards, Sebastian (1998): Openness, Productivity and Growth: What Do We Really Know?, The Economic Journal, 108 (447), 383-398.
https://doi.org/10.1111/1468-0297.00293
Ekanayake, E. M., Vogel, Richard and Veeramacheneni, Bala (2003): Openness and economic growth: Empirical evidence on the relationship between output, inward FDI, and trade, Journal of Business Strategies, 20 (1), 59-72.
Delbianco, Fernando, Dabús, Carlos and María angeles Caraballo Pou (2016): Growth, Inequality and Corruption: Evidence from Developing Countries, Economics Bulletin, 36 (3), 1811-1820.
Gundlach, Erich (1997): Openness and economic growth in developing countries, Review of world economics, 133 (3), 479-496.
https://doi.org/10.1007/BF02707499
Hye, Qazi Muhammad Adnan (2012): Long term effect of trade openness on economic growth in the case of Pakistan, Quality and Quantity, 46 (4), 1137-1149.
https://doi.org/10.1007/s11135-011-9612-0
Hye, Qazi Muhammad Adnan and Wee-Yeap Lau (2015): Trade openness and economic growth: empirical evidence from India, Journal of Business Economics and Management, 16 (1), 188-205.
https://doi.org/10.3846/16111699.2012.720587
Jin, Jang. C. (2000): Openness and growth: an interpretation of empirical evidence from East Asian countries, The Journal of International Trade and Economic Development, 9 (1), 5-17.
https://doi.org/10.1080/096381900362517
Karras, Georgios (2003): Trade Openness and Economic Growth: Can We Estimate the Precise Effect? Applied Econometrics and International Development, 3 (1), 7-25.
Keho, Yaya (2017): The impact of trade openness on economic growth: The case of Cote d’Ivoire, Cogent Economics and Finance 5 (1), 1-14.
https://doi.org/10.1080/23322039.2017.1332820
Kelly, Roger (2016): Does financial sector development enhance the relationship between FDI and economic growth? A comparative study of East African countries, Journal of Reviews on Global Economics, 5, 145-153.
https://doi.org/10.6000/1929-7092.2016.05.12
Kim, Dong-Hyeon, Lin, Shu-Chin and Suen, Yu-Bo (2012): The simultaneous evolution of economic growth, financial development, and trade openness, The Journal of International Trade and Economic Development, 21 (4), 513-537.
https://doi.org/10.1080/09638199.2010.497933
Menyah, Kojo, Saban Nazlioglu and Yemane Wolde-Rufael (2014): Financial development, trade openness and economic growth in African countries: New insights from a panel causality approach, Economic Modelling, 37, 386-394.
https://doi.org/10.1016/j.econmod.2013.11.044
Mercan, Mehmet, Gocer, Ismet, Bulut, Sahin and Metin Dam (2013): The Effect of Openness on Economic Growth for BRIC-T Countries: Panel Data Analysis, Eurasian Journal of Business and Economics, 6 (11), 1-14.
Milanovic, Branko (2016): Global Inequality: A New Approach for the Age Globalization, The Belknap Press of Harvard University Press, Cambridge, Massachusetts, London, England.
https://doi.org/10.4159/9780674969797
Pegkas, Pagianotis (2015): The impact of FDI on economic growth in Eurozone countries, The Journal of Economics Asymmetries, 12 (2), 124-132.
https://doi.org/10.1016/j.jeca.2015.05.001
Ramanayake, Sanika Sulochani and Keun Lee (2015): Does openness lead to sustained economic growth? Export growth versus other variables as determinants of economic growth, Journal of the Asia Pacific Economy, 20 (3), 345-368.
https://doi.org/10.1080/13547860.2015.1054164
Sakyi, Daniel, Richmond Commodore and Eric Evans Osei Opoku (2015a): Foreign direct investment, trade openness and economic growth in Ghana: An empirical investigation, Journal of African Business, 16 (2), 1-15.
https://doi.org/10.1080/15228916.2015.1061283
Sakyi, Daniel, Villaverde José and Adolfo Maza (2015b): Trade openness, income levels, and economic growth: The case of developing countries, 1970–2009, The Journal of International Trade and Economic Development, 24 (6), 860-882.
https://doi.org/10.1080/09638199.2014.971422
Taylor, Alan M. (1998): On the Costs of Inward-Looking Development: Price Distortions, Growth, and Divergence in Latin America, The Journal of Economic History, 58 (1), 1-28.
https://doi.org/10.1017/S0022050700019860
Tahir, Muhammad and Toseef Azid (2015): The relationship between international trade openness and economic growth in the developing economies: Some new dimensions, Journal of Chinese Economic and Foreign Trade Studies, 8 (2), 123-139.
https://doi.org/10.1108/JCEFTS-02-2015-0004
Trinh, Bui, and Bui Quoc (2017): Some Problems on the Sectoral Structure, GDP Growth and Sustainability of Vietnam, Journal of Reviews on Global Economics 6, 143-153.
https://doi.org/10.6000/1929-7092.2017.06.12
Ula?an, Bülent (2015): Trade openness and economic growth: panel evidence, Applied Economic Letters, 22 (2), 163-167.
https://doi.org/10.1080/13504851.2014.931914
Vogiatzoglou, Klimis and Phuong Nguyen (2016): Economic Openness and Economic Growth: a Co-integration Analysis for Asean-5 Countries, The European Journal of Applied Economics, 13 (2), 10-20.
https://doi.org/10.5937/ejae13-11311
Wang, Chengang (2003): Openness and economic growth, Doctoral Thesis, Aston University.
Yanikkaya, Halit (2003): Trade openness and economic growth: a cross-country empirical investigation, Journal of Development Economics, 72 (1), 57-89.
https://doi.org/10.1016/S0304-3878(03)00068-3
Zahonogo, Pam (2018): Globalization and economic growth in developing countries: evidence from Sub-Saharan Africa, The International Trade Journal, 32 (2), 189-208.
https://doi.org/10.1080/08853908.2017.1333933
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Published
2019-07-02
How to Cite
Dabús, C., & Delbianco, F. (2019). Exports, Terms of Trade and Economic Growth: Evidence from Countries with Different Level of Openness. Journal of Reviews on Global Economics, 8, 327–336. https://doi.org/10.6000/1929-7092.2019.08.28
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