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Effect of trade openness on regional economic growth in China: revisiting the discussion

Junying Ma, Jinchuan Shi, Deming Luo and Yi Che ()

Applied Economics Letters, 2019, vol. 26, issue 16, 1313-1316

Abstract: Increasing openness contributes to economic growth in developing countries, but the endogeneity problem impedes drawing this conclusion. This paper uses the constructed trade share to circumvent the effects of endogeneity according to a method proposed by Frankel and Romer. The results demonstrate that increasing openness has a positive impact on provinces’ GDP and GDP per capita. In addition, an increase in lagged openness is beneficial for present economic growth, and even openness gained many years ago, which is measured by the number of treaty ports, makes a difference in present economic growth.

Date: 2019
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DOI: 10.1080/13504851.2018.1558331

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