Regulation, Trade and Economic Growth

34 Pages Posted: 26 Jul 2015 Last revised: 3 Aug 2015

See all articles by Jens Koeniger

Jens Koeniger

Ruhr University of Bochum - Faculty of Economics

Magdalene Silberberger

University Witten/Herdecke

Date Written: July 24, 2015

Abstract

The role of regulatory quality as one of the so-called deep determinants of growth has emerged as an important issue in economic research in the past 20 years. The positive or negative growth effects of a country’s regulatory framework are amplified by economic integration, which makes factors and producers more mobile and enables them to avoid burdensome regulation. Therefore, the two potential determinants to growth might be interlinked. So far there is very little empirical evidence on the impact of the regulatory framework in an integrated economy on growth. We deal with the most common problems in estimating growth equations by using internal instruments to identify a causal relationship between regulation and growth in the presence of international trade and find evidence that both regulation and trade have a significant positive influence on growth, with the effect of regulation being especially pronounced for countries that have worse regulatory quality and for middle-income countries.

Keywords: institution, integration, regulation, openness, trade, growth

JEL Classification: F11, F43

Suggested Citation

Koeniger, Jens and Silberberger, Magdalene, Regulation, Trade and Economic Growth (July 24, 2015). Available at SSRN: https://ssrn.com/abstract=2635507 or http://dx.doi.org/10.2139/ssrn.2635507

Jens Koeniger

Ruhr University of Bochum - Faculty of Economics ( email )

Ruhr University of Bochum
Faculty of Economics
D-44780 Bochum, DE 44780
Germany

Magdalene Silberberger (Contact Author)

University Witten/Herdecke ( email )

Alfred-Herrhausen-Straße 50
Witten, 58448
Germany
+49 (0)2302 / 926-509 (Phone)

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