The relationship between trade openness and economic growth: Some new insights on the openness measurement issue

Marilyne Huchet (), Chantal Le Mouël and Mariana Vijil

Post-Print from HAL

Abstract: Empirical results on the links between trade openness and economic growth often suggest that, in the long run, more outward-oriented countries register better economic growth. However, a similar level of trade openness can hide different types of trade structures. The aim of this paper is to enrich the way of measuring trade openness taking into account two different dimensions of countries' integration in world trade: export quality and export variety. Based on the estimation of an endogenous growth model on a panel of 169 countries between 1988 and 2014 using a Generalized Method of Moments estimator, our results confirm that countries exporting higher quality products and new varieties grow more rapidly. More importantly, we find a non-linear pattern between the export ratio and the quality of the export basket, suggesting that openness to trade may impact growth negatively for countries which are specialized in low quality products. A non-linear relationship between exports variety, the export ratio and growth is also found, suggesting that countries increasing their exports will grow more rapidly after reaching a certain degree of the extensive margin of exports.

Keywords: extensive margin; GMM; dynamic panel model; growth; trade openness; quality; variety (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-agr, nep-gro and nep-int
Note: View the original document on HAL open archive server: https://hal.science/hal-01987393v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (61)

Published in The World Economy, 2018, 41 (1), pp.59-76. ⟨10.1111/twec.12586⟩

Downloads: (external link)
https://hal.science/hal-01987393v1/document (application/pdf)

Related works:
Journal Article: The relationship between trade openness and economic growth: Some new insights on the openness measurement issue (2018)
Working Paper: The relationship between trade openness and economic growth: Some new insights on the openness measurement issue (2013)
Working Paper: The relationship between trade openness and economic growth: some new insights on the openness measurement issue (2011)
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:hal:journl:hal-01987393

DOI: 10.1111/twec.12586

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().