The Effect of Trade Openness and Economic Freedom on Economic Growth: the Case of Middle East and East Asian Countries

Mohammad Javad Razmi and Refaei Refaei ()
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Mohammad Javad Razmi: Department of Economics, Ferdowsi University of Mashhad, Iran

International Journal of Economics and Financial Issues, 2013, vol. 3, issue 2, 376-385

Abstract: One of the rudiment features of international trade theory is that open economies achieve high economic growth rates than closed economies. The current study aims to investigate how economic freedom impacts economic growth. Therefore, economic growth model is estimated by using 17(Middle East and East Asian) countries' data during 2000-2009.In order to testing the data, panel data analysis is employed. The results show that overall index of economic freedom is positively and robustly correlated with growth, further, the results demonstrate that trade openness is positively associated and statistically significant determinant of growth. We find that economic freedom has significant effect on economic growth. Furthermore, we decompose the economic freedom index into the five categories constructing the index and observed that just index of size of government and index of access to sound money is negatively correlated with growth

Keywords: : Economic Freedom; Openness; Economic Growth; Panel Data (search for similar items in EconPapers)
JEL-codes: C33 F43 O50 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ1:2013-02-11

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