Trade Structure and Economic Growth

Posted: 22 May 2011

See all articles by Raja Kali

Raja Kali

University of Arkansas - Department of Economics

Fabio Mendez

University of Arkansas - Sam M. Walton College of Business

Javier A. Reyes

University of Arkansas - Sam M. Walton College of Business

Date Written: 2007

Abstract

How do the number of trade partners and the concentration of trade among partners affect the economic growth of a country? We refer to these characteristics as the structure of trade, and explore this question empirically in this study. We find that the structure of trade, independently of the level of trade itself, has an important effect on the rate of economic growth. The results of the study suggest that the number of trading partners is positively correlated with growth across all countries, and this effect is more pronounced for rich countries. Trade concentration is positively correlated with growth for all countries, and the effect is concentrated in poor countries. Previous work has overlooked these characteristics of trade, although we find them to be quite relevant and that they could lead to new ways of understanding the trade - growth relationship.

Keywords: Trade, growth, trade structure, trade concentration

JEL Classification: O1, F43, O47, F0, O4

Suggested Citation

Kali, Raja and Mendez, Fabio and Reyes, Javier A., Trade Structure and Economic Growth (2007). Journal of International Trade and Economic Development, Vol. 16, No. 2, pp. 245-269, 2007. Available at SSRN: https://ssrn.com/abstract=1846727

Raja Kali

University of Arkansas - Department of Economics ( email )

Sam M. Walton College of Business
Fayetteville, AR 72701
United States
479-575-6219 (Phone)
479-575-3241 (Fax)

HOME PAGE: http://wcob.uark.edu/rkali/index.html

Fabio Mendez

University of Arkansas - Sam M. Walton College of Business ( email )

Fayetteville, AR 72701
United States

Javier A. Reyes (Contact Author)

University of Arkansas - Sam M. Walton College of Business ( email )

2 East Center Street
University of Arkansas
Fayetteville, AR 72701
United States
479-575-6079 (Phone)

HOME PAGE: http://economics.uark.edu/directory.php?id=reyes

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