Openness, Productivity and Growth: What Do We Really Know?

Edwards, Sebastián

doi:10.3386/w5978

Cited by 518 publications

(679 citation statements)

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“…However, Edwards argued that the poorer economies can grow faster than the advanced economies when the imitation cost of innovation in the poorer economies becomes lower than the cost of innovation in the technologically advanced economies [21]. This hypothesis supports the transaction cost theory in that markets for the intermediary products are usually imperfect and, firms, as economic agents, need to incur certain costs to complete a transaction.…”

Section: Introductionsupporting

confidence: 63%

Dynamic Effects of FDI, Trade Openness, Capital Formation and Human Capital on the Economic Growth Rate in the Least Developed Economies: Evidence from Nepal

Adhikary¹

2015

IJTEF

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Abstract-The study investigates the linkage between FDI, trade openness, capital formation, human capital, and economic growth rate in Nepal using the vector error correction (VEC) model. The study reveals that a long-run equilibrium relationship exists between variables. Besides, trade openness and FDI have a dynamic positive effect on the GDP per capita growth rate in Nepal. On the other hand, human capital does not appear to be a significant factor, whereas capital formation demonstrates a negative association with rates of economic growth. The VEC based Granger causality test indicates that a unidirectional short-term causal flow runs between FDI, trade openness, and GDP per capita growth rate. However, the impulse response analysis reveals that this relationship is not stable rather volatile over time. The study suggests that Nepal should adopt more liberalized trade policy to attract foreign capitals and to ensure stable economic growth rate. Simultaneously, it needs to invest more in its human capital to reap spillover effects of foreign technologies on other sectors.

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Section: Introductionsupporting

confidence: 63%

Dynamic Effects of FDI, Trade Openness, Capital Formation and Human Capital on the Economic Growth Rate in the Least Developed Economies: Evidence from Nepal

Adhikary¹

2015

IJTEF

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“…2 Examples include Dollar (1992), Edwards (1992Edwards ( , 1998, Lee (1993), Sachs and Warner (1995), Harrison (1996), Vamvakidis (1999), Frankel and Romer (1999), Greenaway et al (2002), Yanikkaya (2003), Lee et al (2004), Aksoy and Salinas (2006), Foster (2008), Kneller et al (2008), Wacziarg and Welch (2008), Chang et al (2009), Kim (2011). also during 1960s and it is more likely that their trade policy measures did not change substantially over the period .…”

Section: Introductionmentioning

confidence: 99%

Openness to International Trade and Economic Growth: A Cross-Country Empirical Investigation

Ulasan¹

2012

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may Bülent Ulaşan Central Bank of the Republic of TurkeyAbstract In this paper, we revisit the empirical evidence on the relationship between trade openness and long-run economic growth over the sample period 1960-2000. In contrast to previous studies focusing mainly on the period 1970-1990, this paper reassesses the openness-growth nexus over a much longer sample period, enabling us to better account both trade policy stance and long-run growth dynamics. We carry out our empirical investigation by employing various openness measures suggested in the literature rather than relying on a few proxy variables. We also construct three additional composite trade policy indexes directly measuring trade policy stance. Our findings indicate that many openness variables are positively and significantly correlated with long-run economic growth. However, in some cases, this result is driven by the presence of a few outlying countries. Adding to the fragility of the openness-growth association, the significance of openness variables disappears once other growth determinants, such as institutions, population heterogeneity, geography and macroeconomic stability are accounted for.JEL F13, F43, O47.

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“…Lee, Ricci, and Rigobon (2004) use "identification through heteroskedasticity" and find that openness has a positive, but small, effect on growth, controlling for the positive effect of growth on openness. Edwards (1998) shows a consistently positive relationship between growth and nine measures of openness. Harrison (1996) finds a positive relationship between a number of measures of openness and growth in a panel study of developing countries.…”

Section: Introductionmentioning

confidence: 99%