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The Impact of Government Trade Liberalization Policy on the Economic Complexity of Developing Countries

Hamid Sepehrdoust (), Maryam Setarehie () and Razieh Davarikish ()
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Hamid Sepehrdoust: Associate Professor in Economics, Department of Economics, Bu-Ali-Sina University, Hamedan, Iran
Maryam Setarehie: Ph.D Student in Economics, Faculty of Economics and Social Sciences, Bu-Ali Sina University, Hamadan, Iran
Razieh Davarikish: Ph.D Student in Economics, Faculty of Economics and Social Sciences, Bu-Ali Sina University, Hamadan, Iran

Quarterly Journal of Applied Theories of Economics, 2020, vol. 7, issue 1, 211-238

Abstract: The purpose of this study was to investigate the impact of government trade liberalization on the economic complexity of eight developing economies named Group D8 member countries during the period 2002-2017; using the PVAR method. immediate reaction test results show that, over a period of 10 years, economic complexity increases with positive shock from variables of trade freedom, foreign direct investment and gross fixed capital formation, but in the long run, the effect of imports of intermediary and capital goods is initially increasing and, after a short period, has a positive downward effect. The results of the analysis of variance also show, the variables of economic complexity, import of intermediate and capital goods, gross fixed capital formation, trade freedom and foreign direct investment respectively have the most impact on economic complexity, respectively

Keywords: trade liberalization; economic complexity; developing countries (D8); PVAR (search for similar items in EconPapers)
JEL-codes: A20 F02 F12 F13 (search for similar items in EconPapers)
Date: 2020
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