Trade openness and regional development in a developing country

Abstract

This paper examines how economic openness influences regional development in a developing country, with the Philippines as a case study. It first looks at the disparities in economic and social indicators across the country's 14 regions and over time. Metro Manila continues to tower over the national economic landscape, although economic dispersal especially in adjacent regions appears to be expanding. The paper then analyzes the determinants of regional development, using five-year panel data. Trade openness appears to be beneficial to regional economic growth and, via growth, poverty reduction. However, it cannot by itself be expected to bring about more balanced regional development. Copyright Springer-Verlag 2003I32, 018, R11,

Trade, Migration and Poverty Reduction in the Globalizing Economy: The Case of the Philippines

“…Using household data from the Philippines, Pernia and Quising (2003) find that trade openness appears to be beneficial to regional economic growth because it induces movement of the production base away from the NCR, which has been the hub of major economic sparks in the country. Pernia and Quising (2003) find that most of the special economic zones (SEZs), which are largely export processing zones (EPZs), have started to move out of NCR to relocate to Southern Tagalog, Central Luzon and Central Visayas. The movement of industries away from NCR has been facilitated by the Bases Conversion and Development Act, 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Year…”

“…OPEN is constructed for 14 regions in 1988, 1994 and 2000, with the exclusion of 1985, 1991 and 1997 only. While the sample size reduces to about half when we exclude the three years, Pernia and Quising (2003) argue that significant liberalization measures were introduced in the Philippine economy in 1988, 1994 and 2000, thus, making these years particularly suitable for our analysis. Also, these three years cover the wake of the Asian currency crisis when the national economic growth rate fell back significantly.…”

The Effects of Global Interaction on Poverty in Developing Countries, 1991-2005

“…Ravallion (2006Ravallion ( : 1388 investigated the relationship between openness and poverty reduction in case studies of China and Morocco, stating that his findings "cast doubt" that openness has either a positive or negative effect on poverty. Other case studies in the Philippines (Pernia and Quising 2003) and Brazil (Carneiro and Arbache 2003) offer further evidence that openness alone is insufficient for poverty reduction. This study extends this line of research by testing whether there is a trade openness effect on poverty alongside other competing global and domestic effects.…”

Untitled

“…Furthermore, he contends, the mounting evidence suggests that globalization has been associated with both increased peripheralization of countries on the international level and regions at sub-national scales. Pernia and Quising (2003) examined whether economic openness 2 influenced regional development and more specifically, poverty reduction in Phillipines. On the whole it appears that economic openness is beneficial to regional economic growth and via growth to poverty reduction.…”