Empirical Evidence on the Relationship between Trade Openness and Economic Growth

Global Journal of Business Research, v. 9 (3) p. 91-96

6 Pages Posted: 29 Jan 2016

See all articles by Rajeh Alragas

Rajeh Alragas

Swansea University

P. Murphy

Swansea University

Mamata Parhi

Swansea University

T.K. Mishra

Swansea University

Bazoumana Ouattara

University of Manchester

Date Written: 2015

Abstract

This paper examines the impact of trade openness on economic growth using a new measure of trade openness proposed by Squalli1 and Wilson (2011). In contrast to the vast majority of the existing literature, the new measure of trade openness accounts for not only the country trade share of its GDP but also the relative size of the country’s trade compared to the world trade in a given year. Using this innovative way to measure openness, the current essay examines the impact of trade openness on economic growth. We use data set includes 182 countries and covers the period from 1971 to 2011. We employ the Common Correlated Effects Mean Group (CCEMG) estimator developed by Pesaran (2006) and applied Cavalcanti et al. (2011) which takes into consideration the heterogeneity nature of world countries.

Keywords: Trade Openness, Economic Growth, Common Correlated Effects Mean Group (CCEMG) Estimator

JEL Classification: F140

Suggested Citation

Alragas, Rajeh and Murphy, P. and Parhi, Mamata and T.K.Mishra, T.K.Mishra and Ouattara, Bazoumana, Empirical Evidence on the Relationship between Trade Openness and Economic Growth (2015). Global Journal of Business Research, v. 9 (3) p. 91-96, Available at SSRN: https://ssrn.com/abstract=2664334

Rajeh Alragas (Contact Author)

Swansea University ( email )

Singleton Park
Swansea, Wales SA2 8PP
United Kingdom

P. Murphy

Swansea University ( email )

Mamata Parhi

Swansea University ( email )

T.K.Mishra T.K.Mishra

Swansea University ( email )

Singleton Park
Swansea, Wales SA2 8PP
United Kingdom

Bazoumana Ouattara

University of Manchester ( email )

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