Trade and economic growth: A re-examination of the empirical evidence

Matthias Busse and Jens Königer

No 123, HWWI Research Papers from Hamburg Institute of International Economics (HWWI)

Abstract: While trade integration is often regarded as a principal determinant of economic growth, the empirical evidence for a causal linkage between trade and growth is ambiguous. This paper argues that the effect of trade in dynamic panel estimations depends crucially on the specification of trade. Both from a theoretical as well as an empirical point of view one specification is preferred: the volume of exports and imports as a share of lagged total GDP. For this trade measure, a positive and highly significant impact on economic growth can be found.

Keywords: Openness; Trade; Growth (search for similar items in EconPapers)
JEL-codes: C23 F11 F43 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-fdg and nep-int
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Citations: View citations in EconPapers (32)

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Journal Article: Trade and economic growth: A re-examination of the empirical evidence (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:hwwirp:123

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