The Trade-Growth Nexus in the Developing Countries: a Quantile Regression Approach

Gilles Dufrénot (), Valérie Mignon () and Charalambos Tsangarides

Working Papers from CEPII research center

Abstract: This paper applies quantile regression techniques to investigate how the impact of trade openness on the growth rate of per capita income varies with the conditional distribution of growth. Using formal robustness analyses, we first identify robust variables affecting economic growth (investment, government balance, terms of trade, inflation, and population growth) which we then use as controls in the quantile regression estimations. Our findings suggest a heterogeneous trade-growth nexus: for both the long-run and the short-run, the effect of openness on growth is higher in countries with low growth rates compared to those of high growth rates. Our results cast doubt on earlier literature that finds little effect of openness on growth, and suggest that the implications of parameter heterogeneity in the openness-growth relationship need to be considered before prescribing policies.

Keywords: Quantile regression; Growth-trade nexus; Developing countries (search for similar items in EconPapers)
JEL-codes: C23 F13 O11 (search for similar items in EconPapers)
Date: 2009-03
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (15)

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Journal Article: The trade-growth nexus in the developing countries: a quantile regression approach (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:cii:cepidt:2009-04

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