External Openness and Economic Growth in Developing Countries

16 Pages Posted: 25 Oct 2011

See all articles by Andrzej Cieslik

Andrzej Cieslik

Warsaw University - Department of Economics

Monika Tarsalewska

University of Exeter Business School

Date Written: November 2011

Abstract

This paper investigates empirically the relationship between two channels of external openness: international trade, foreign direct investment (FDI), and the rate of economic growth implied by the leader–follower model. The predictions of the theory are tested for the group of 97 developing countries in the period of 1974–2006 using static and dynamic panel data estimation methods. The estimation results show that both international trade and FDI positively contribute to growth.

Suggested Citation

Cieslik, Andrzej and Tarsalewska, Monika, External Openness and Economic Growth in Developing Countries (November 2011). Review of Development Economics, Vol. 15, Issue 4, pp. 729-744, 2011. Available at SSRN: https://ssrn.com/abstract=1948938 or http://dx.doi.org/10.1111/j.1467-9361.2011.00639.x

Andrzej Cieslik (Contact Author)

Warsaw University - Department of Economics ( email )

Macroeconomics and International Trade Theory Division
Warsaw 00-241
Poland
+48 22 831 4725 (Phone)
+48 22 831 2846 (Fax)

Monika Tarsalewska

University of Exeter Business School ( email )

XFI building, Streatham Campus
Rennes Drive
Exeter, Devon EX4 4ST
United Kingdom

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