Paradox of trade openness: The moderated mediating role of governance

Hyun-Jung Nam, Jeongseok Bang and Doojin Ryu

Journal of International Financial Markets, Institutions and Money, 2023, vol. 89, issue C

Abstract: This study compares the impact of trade openness on gross domestic product (GDP) growth and human development in a panel of the Association of Southeast Asian Nations (ASEAN) member states. Our results indicate that trade openness has a positive effect on GDP growth but a negative effect on human development. To mitigate this negative impact of trade openness on human development, we propose the roles of governance and foreign direct investment (FDI). Governance plays a moderated mediating role and FDI has a mediating role, collectively strengthening the positive effect of trade openness on economic development.

Keywords: Foreign direct investment; Governance; Gross domestic product; Human development; Trade openness (search for similar items in EconPapers)
JEL-codes: F10 F40 G15 G18 I39 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:89:y:2023:i:c:s1042443123001555

DOI: 10.1016/j.intfin.2023.101887

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