International Trade and Economic Growth: Cross-Country Evidence

GRP International Journal of Business and Economics ISSN 2048-8556[ONLINE] Vol. 1 No.2, 2012, PP.87-95

9 Pages Posted: 3 Jul 2012 Last revised: 17 Sep 2012

See all articles by Dushko Josheski

Dushko Josheski

University Goce Delcev

Darko Lazarov

University Goce Delcev

Date Written: July 3, 2012

Abstract

Many empirical studies have been done to investigate whether growth is influenced by international trade. But despite the great effort that has been devoted to studying the issue, there is little persuasive evidence concerning the effect of trade on growth. The main subject of our paper is to summarize the main findings based on empirical research that have been done to investigate the relationship between the trade and economic growth by using data for 208 regions and countries in OLS regression analysis.

Our results from empirical investigation show: 1) the ratio of trade volume (sum of exports and imports at current prices-current openness or sum of exports plus sum of imports) to GDP as a proxy of trade openness has positive effect on economic growth, 2) black market premium as a proxy for imbalance in macroeconomic policies has negative effect, 3) in the presence of macroeconomic policies, trade has statistically and economic significant positive influence on growth, and 4) in an institutional environment trade lacks influencing growth, the coefficient on institutions is positive and statistically significant.

Keywords: International trade, economic growth, institutions, macroeconomic imbalances

JEL Classification: F43, F41

Suggested Citation

Josheski, Dushko and Lazarov, Darko, International Trade and Economic Growth: Cross-Country Evidence (July 3, 2012). GRP International Journal of Business and Economics ISSN 2048-8556[ONLINE] Vol. 1 No.2, 2012, PP.87-95, Available at SSRN: https://ssrn.com/abstract=2098972 or http://dx.doi.org/10.2139/ssrn.2098972

Dushko Josheski (Contact Author)

University Goce Delcev ( email )

Stip
Macedonia
+389 32 550 000 (Phone)
+389 32 390 700 (Fax)

HOME PAGE: http://www.ugd.edu.mk/

Darko Lazarov

University Goce Delcev ( email )

PO box 201
Stip, 2000
Macedonia
+389 550 317 (Phone)

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