Economic Openness and Growth in China and India: A Comparative Study
DOI:
https://doi.org/10.6000/1929-7092.2012.01.12Keywords:
Economic openness, KOF index, Melo-Vogt hypotheses, Hansen test, FMOLS, DOLSAbstract
Abstract: This paper examines the Melo-Vogt hypotheses and compares the effects of economic openness in China and India. The two defining characteristics of this paper are the addition of a cross term containing the economic globalization index to the traditional import demand function model, and testing for cointegration between variables using Hansen's (1992) method that considers structural change. The results indicate that increasing economic openness has had a greater impact on the economy in China than in India.
References
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Boylan, T. A. and M.P. Cuddy. (1987). “Elasiticities of Import Demand and Economic Development.” Journal of Development Economics, 26: 301-9.
http://dx.doi.org/10.1016/0304-3878(87)90032-0
Carone, G. (1996). “Modeling U.S. Demand for Imports through Cointegration and Error Correction.” Journal of Policy Modeling, 18: 1-48.
http://dx.doi.org/10.1016/0161-8938(95)00058-5
Dollar, D. (1992). “Outward-oriented Developing Economies Really Do Grow More Rapidly: Evidence from 95 LDCs, 1976-1985.” Economic Development and Cultural Change, 40: 523-44.
http://dx.doi.org/10.1086/451959
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http://dx.doi.org/10.1080/00036840500392078
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Johnson, B. and T. Sheehy, eds. (1996). 1996 Index of Economic Freedom, Washington: The Heritage Foundation.
Mah, J. S. (1999). “Import Demand, Liberalization, and Economic Development.” Journal of Policy Modeling, 21: 497-503.
http://dx.doi.org/10.1016/S0161-8938(98)00002-7
Melo, O. and M. G. Vogt. (1984). “Determinants of the Demand for Imports of Venezuela.” Journal of Development Economics, 14: 351-8.
http://dx.doi.org/10.1016/0304-3878(84)90064-6
Michaely, M., D. Papageorigiou, and A, Choksiu, eds. (1991). Liberalizing Foreign Trade, Oxford: Blackwell.
Phillips, P. C. B. and B. E. Hansen. (1990). “Statistical Inference in Instrumental Variables Regression with I(1) Processes.” Review of Economic Studies, 57: 99-125.
http://dx.doi.org/10.2307/2297545
Sachs, J. D. and Andrew M. Warner. (1995). Economic Convergence and Economic Policies, NBER Working Papers 5039, National Bureau of Economic Research.
Stock, J. and M. Watson. (1993). “A Simple Estimator of Cointegrating Vectors in Higher-order Integrated Systems.” Econometrica, 61: 783-820.
http://dx.doi.org/10.2307/2951763
World Bank. (1987). World Development Report 1987, Oxford: Oxford University Press.
Balassa, B. (1982). Development Strategies in Semi-industrial Countries, Oxford: Oxford University Press.
Boylan, T. A. and M.P. Cuddy. (1987). “Elasiticities of Import Demand and Economic Development.” Journal of Development Economics, 26: 301-9.
http://dx.doi.org/10.1016/0304-3878(87)90032-0
Carone, G. (1996). “Modeling U.S. Demand for Imports through Cointegration and Error Correction.” Journal of Policy Modeling, 18: 1-48.
http://dx.doi.org/10.1016/0161-8938(95)00058-5
Dollar, D. (1992). “Outward-oriented Developing Economies Really Do Grow More Rapidly: Evidence from 95 LDCs, 1976-1985.” Economic Development and Cultural Change, 40: 523-44.
http://dx.doi.org/10.1086/451959
Dreher, A. (2006). “Does Globalization Affect Growth? Evidence From a New Index of Globalization.” Applied Economics, 38: 1091-110.
http://dx.doi.org/10.1080/00036840500392078
Dreher, A., G. Noel, and M. Pim. (2008). Measuring Globalisation—Gauging Its Consequences, New York: Springer.
Edwards, S. (1998). “Openness, Productivity, and Growth: What Do We Really Know?” The Economic Journal, 108: 383-98.
http://dx.doi.org/10.1111/1468-0297.00293
Gwartney, J. and R. Lawson. (2002). Economic Freedom of the World: Annual Report, http:// www.freetheworld.org/
Hansen, B. E. (1992). “Tests for Parameter Instability in Regressions with I(1) Processes.” Journal of Business and Economic Statistics, 10: 321-35.
Johnson, B. and T. Sheehy, eds. (1996). 1996 Index of Economic Freedom, Washington: The Heritage Foundation.
Mah, J. S. (1999). “Import Demand, Liberalization, and Economic Development.” Journal of Policy Modeling, 21: 497-503.
http://dx.doi.org/10.1016/S0161-8938(98)00002-7
Melo, O. and M. G. Vogt. (1984). “Determinants of the Demand for Imports of Venezuela.” Journal of Development Economics, 14: 351-8.
http://dx.doi.org/10.1016/0304-3878(84)90064-6
Michaely, M., D. Papageorigiou, and A, Choksiu, eds. (1991). Liberalizing Foreign Trade, Oxford: Blackwell.
Phillips, P. C. B. and B. E. Hansen. (1990). “Statistical Inference in Instrumental Variables Regression with I(1) Processes.” Review of Economic Studies, 57: 99-125.
http://dx.doi.org/10.2307/2297545
Sachs, J. D. and Andrew M. Warner. (1995). Economic Convergence and Economic Policies, NBER Working Papers 5039, National Bureau of Economic Research.
Stock, J. and M. Watson. (1993). “A Simple Estimator of Cointegrating Vectors in Higher-order Integrated Systems.” Econometrica, 61: 783-820.
http://dx.doi.org/10.2307/2951763
World Bank. (1987). World Development Report 1987, Oxford: Oxford University Press.
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Published
2012-11-06
How to Cite
Yin, F., & Hamori, S. (2012). Economic Openness and Growth in China and India: A Comparative Study. Journal of Reviews on Global Economics, 1, 139–149. https://doi.org/10.6000/1929-7092.2012.01.12
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