Openness, Growth, and Development: Evidence from a Panel of East Asian Countries

Zohreh Shirani Fakhr () and Azita Sheikhbahaie
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Zohreh Shirani Fakhr: M.A. of Economics, University of Isfahan
Azita Sheikhbahaie: M.A. of Economics, University of Isfahan

Iranian Economic Review (IER), 2008, vol. 13, issue 2, 157-174

Abstract: This paper examines the interaction between openness, growth, and development using a panel of ten developing East Asian countries (China, Japan, Korea, Malaysia, Indonesia, the Philippines, Singapore, Hong Kong, Macao and Vietnam) and five-year averages for the period, 1975-2005. Its primary objective is to determine whether there is a direct link between the level of development and openness, while controlling for the indirect effect of openness through its impact on economic growth. Using a two-equation simultaneous-equations model of development and growth and an alternative measure of openness, our findings suggest that openness has a positive influence on both economic growth and human development. We also find that while economic growth makes a positive contribution to development, the converse is not true in that the more developed a nation the slower its growth rate.

Keywords: Trade Openness; Economic Growth; Development; Two equation simultaneous-equations model (2SLS); East Asian Countries. (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:eut:journl:v:13:y:2008:i:2:p:157

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