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TRADE OPENNESS AND ECONOMIC GROWTH: A CAUSALITY TEST IN PANEL PERSPECTIVE

International Journal of Business and Society

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Title TRADE OPENNESS AND ECONOMIC GROWTH: A CAUSALITY TEST IN PANEL PERSPECTIVE
 
Creator Idris, Jamilah
Yusop, Zulkornain
Habibullah, Muzafar Shah
 
Description Openness to trade has been one of the primary drivers stimulating growth. The goal of this particular study is to investigate the relationship between trade openness and economic growth in 87 selected countries which includes both Organizations for Economic Co-operation and Development (OECD) and developing countries for 1977–2011 periods. We used two measures of trade openness i.e. the ratio of trade openness (TO) typically spoke by exports plus imports in nominal value divided by GDP (nominal) which is commonly used in the literature, and trade openness in real (RO) which is defined as the sum of imports and exports in US$ relative to GDP in purchasing power parity US$ (real GDP). An empirical studywas conducted to determine the causal relationship between trade openness and growth in a panelperspective. We used a dynamic panel data estimation method i.e. the general method of moments (GMM). The empirical results reveal a bidirectional causal relationship for both developing and OECD countries. Our finding is consistent with the endogenous theory that increased openness leads to higher growth, which thus prompts expanded openness.Keywords: Openness; Economic Growth; Dynamic Panel General Method of Moments (GMM).
 
Publisher Faculty of Economics and Business, UNIMAS
 
Date 2017-11-20
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://publisher.unimas.my/ojs/index.php/IJBS/article/view/525
 
Source International Journal of Business and Society; Vol 17 No 2 (2016): International Journal of Business and Society
1511-6670
 
Language eng
 
Relation http://publisher.unimas.my/ojs/index.php/IJBS/article/view/525/469
 
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