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Growth spillover through trade: A spatial dynamic panel data approach

Chun-Yu Ho (), Wei Wang and Jihai Yu ()

Economics Letters, 2013, vol. 120, issue 3, 450-453

Abstract: This paper empirically examines the international spillover of economic growth through bilateral trade. We extend the Solow growth model with a spatial autoregressive term and a spatial time lag term, and estimate such a model with a sample of 26 OECD countries over the period 1971–2005. We find that there is a positive spillover effect of growth from one country to its trade partners. The implied rate of convergence is higher after including the spatial terms.

Keywords: Convergence; Dynamic panels; Spatial effect; Spillover (search for similar items in EconPapers)
JEL-codes: O33 O47 O51 (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1016/j.econlet.2013.05.027

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