Division, International Integration, and Economic Development

M Q Dao

Studies in Economics and Econometrics, 2009, vol. 33, issue 2, 49-58

Abstract: This paper examines the impact of divisions between nation-states and of international integration on per capita GDP in developing countries. Based on data from the World Bank and using a sample of fifty-nine developing economies, we find that per capita GDP is linearly dependent upon various measures of economic divisions and integration such as the number of countries for which the nationals of a country need a visa, the percentage of foreigners born in a country other than that in which they live (including refugees), the index of shipping difficulties, average tariffs as a percentage of import value, country size, the proportion of the total population living in less than 25kms from a coastline, and trade with neighbouring countries as a proportion of the total trade of the country. The inclusion of interaction variables yields superior results as it takes into account the problem of multicollinearity among some explanatory variables. Statistical results of such empirical examination will assist policy makers in those countries identify areas the budgets for which need to be reallocated in order to stimulate economic development.

Date: 2009
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DOI: 10.1080/10800379.2009.12106468

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