Trade-Growth Nexus in Developing and Developed Countries: An Application of Extreme Bounds Analysis

Mansour Zarra-Nezhad, Fatimah Hosseinpour and Seyed Aziz Arman

Asian Economic and Financial Review, 2014, vol. 4, issue 7, 915-929

Abstract: In this study, we investigated the relationship between foreign trade and economic growth in the developing and developed countries by using extreme bounds analysis approach. For this we used unbalanced panel data of 103 variables of 94 countries (74 developing countries and 20 developed countries) during 1990-2010. The estimation results of more than 1.6 million regressions show that more foreign trade indices are robust determinants of economic growth and have robustly positive effect on the economic growth of each country regardless of level of development. In the other words, results of this study support views of free trade advocates.

Keywords: Foreign trade; Economic growth; Robust; Extreme bounds analysis; Developing countries; Developed countries. (search for similar items in EconPapers)
Date: 2014
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