Trade-induced Investment-led Growth

Richard Baldwin and Elena Seghezza ()

No 1420, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper presents five theoretical openness-and-growth links that can account for trade-induced investment-led growth. The links are all demonstrated with neoclassical growth models developed in the context of trade models that allow for imperfect competition and scale economies. This sort of old-growth-theory-in-a-new-trade model has not been thoroughly explored in the literature since the profession skipped from old-growth-old-trade models straight to new-growth-new-trade models. Nonetheless, such models are necessary to explain several key aspects of the econometric evidence on trade and growth. For example, cross-country data suggests that openness influences growth only via its effect on investment, and suggests that openness promotes investment in all countries whatever the capital-intensiveness of their exports (contrary to predictions of the old-growth-old-trade models).

Keywords: Neoclassical Growth; Trade-induced Investment-led Growth, Trade and Growth (search for similar items in EconPapers)
JEL-codes: F12 F43 (search for similar items in EconPapers)
Date: 1996-06
References: Add references at CitEc
Citations: View citations in EconPapers (56)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=1420 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Trade-Induced Investment-led Growth (1996)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:1420

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=1420

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().