The effect of trade openness on economic growth: Some empirical evidence from emerging market economies

2020 ◽  
Vol 20 (3) ◽  
Author(s):  
Chandrashekar Raghutla
Keyword(s):  
Economic Growth ◽  
Empirical Evidence ◽  
Emerging Market ◽  
Trade Openness ◽  
Emerging Market Economies ◽  
Market Economies

scholarly journals Globalisation and economic growth in South Africa: Do we benefit from trade and financial liberalisation?

2003 ◽  
Vol 6 (2) ◽  
pp. 218-242
Author(s):  
Elsabe Loots
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Emerging Market ◽  
Trade Openness ◽  
Gdp Per Capita ◽  
Emerging Market Economies ◽  
Market Economies ◽  
Cent Increase ◽  
Financial Liberalisation ◽  
Per Capita

This article investigates whether the process of globalisation, through trade and financial liberalisation, benefits economic growth in emerging market economies in general and in South Africa in particular. The analysis of trade openness and liberalisation in emerging market economies reveals that trade volume has a relative small impact on GDP per capita, while trade liberalisation led to an approximate 50 per cent increase on GDP per capita. The analysis of the financial dimension showed that capital account openness is associated with a 34 per cent increase in real GDP per capita growth over the period, while financial liberalisation seems to have a dramatic impact of approximately 136 per cent. In South Africa approximately 98 per cent of the current growth performance in the country can be explained by the forces of globalisation.

The impacts of income inequality on the gross domestic product under direct taxation: evidence from emerging market economies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ahmet Eren Yıldırım ◽  
Mete Dibo
Keyword(s):  
Economic Growth ◽  
Fiscal Policy ◽  
Income Inequality ◽  
Gross Domestic Product ◽  
Emerging Market ◽  
Domestic Product ◽  
Emerging Market Economies ◽  
Content Type ◽  
Market Economies ◽  
Direct Taxation

PurposeThis study analyzes the impacts of income inequality after direct taxation on the gross domestic product as a fiscal policy tool in the development process.Design/methodology/approachThe model of the study is based on Munielo-Gallo and Roca-Sagales (2013), which examined the fiscal policy, income inequality and economic growth simultaneously. The study uses two models to analyze the relationship between income inequality and gross domestic production under direct taxation by employing autoregressive distributed lag (ARDL) model for selected emerging market economies.FindingEmpirical results reveal a negative long-run relationship between variables in some countries in line with the literature, despite a positive relationship in others. Moreover, the results exhibit the negative impact of income inequality after direct taxation on the gross domestic product decreases.Originality/valueResults of the study highlight the importance of direct taxation on income inequality concerning the reflects on economic growth. It suggests that when the income distribution is fairer, it may positively affect the gross domestic product. The study provides a new perspective to the related literature by investigating the role of income inequality under direct taxation for gross domestic product.

scholarly journals Economic Freedoms and Economic Growth: An Investigation on Emerging Market Economies

2015 ◽  
Author(s):  
Bedriye Tunçsiper ◽  
Ömer Faruk Biçen
Keyword(s):  
Economic Growth ◽  
Economic Freedom ◽  
Emerging Market ◽  
Property Right ◽  
Emerging Market Economies ◽  
Dependency Ratio ◽  
Market Economies ◽  
Economic Freedom Index ◽  
The Relationship ◽  
Business Freedom

The common view in the economics theory relating to the fact that economic freedom will raise labor productivity and it will provide effective use of scarce resources becomes a current issue with the increase in the number of papers investigating the effect of economic freedom on economic growth. One of the main reasons of the increasing number of those papers is that economic freedom can be measured quantitatively (numerically) through the indexes calculated by various institutions. In this paper, the relationship between economic freedoms and economic growth for some emerging market economies is investigated. In estimating of the relationship between economic freedoms and economic growth, overall economic freedom index, property right index, business freedom index, trade freedom index and investment freedom index, which was created by the Heritage Foundation was used. Investment/GDP ratio and population dependency ratio are also control variables in the model. In the paper, in which panel fixed effect model was used, property right index, investment freedom index and population dependency ratio affect economic growth negatively, but business freedom index, trade freedom index and investment/GDP ratio affect economic growth positively. It isn’t found that there is a significantly relationship between overall economic freedom index and economic growth.

scholarly journals TAX POLICY IN OECD COUNTIES

2018 ◽  
pp. 127-138
Author(s):  
Mykola PASICHNYI
Keyword(s):  
Economic Growth ◽  
Fiscal Policy ◽  
Tax Policy ◽  
Emerging Market ◽  
Oecd Countries ◽  
Emerging Market Economies ◽  
Tax Structure ◽  
Market Economies ◽  
Favorable Conditions

Introduction. Globalization intensifies the necessity for intergovernmental cooperation aiming to implement the measures on the tax and customs regulation. Considering both the economic cyclicality and historical retrospective, it is expedient to study the advanced and emerging market economies’ experience in the field of developing and implementing a set of fiscal policy measures during the economic expansion, recession, stagnation, and post-crisis recovery periods. The purposeis to systemize the experience of the government tax policy preparation and implementation in the OECD countries in the long-term retrospective, and to assess the tax structure and the level of taxation impact on economic growth. Results. Based on methods of economic regression to evaluate the fiscal policy in the OECD countries over 1981–2016 period, it was determined that increase in the tax burden did not provoke any significant destructive effect on the economy. At the same time, in the context of the tax structure, the taxes on capital had a negative impact on the real GDP growth rates, the taxes on labor had a lower degree of influence, and the effect of the taxes on consumption was almost neutral. The main measures of the tax regulation aimed to create the most favorable conditions for a long-term economic growth were investigated. The tax revenues structure’s complex analysis was carried out; the main tendencies of taxation were generalized. Conclusion. Tax policy is as an adaptive mechanism allowing to regulate the country’s economic development. The OECD countries consistently implement the systematic measures to reduce the income tax rate. This practice is caused by the need to create the most favorable conditions for the entrepreneurship development. Regarding the universal consumption taxes, a gradual rise in their rates was recorded. That fact is reflected by an increase in these taxes’ fiscal importance (taking into account the neutrality of their impact on the economic agents’ business activity). The transformation in the import operations’ model of taxation as well as the implementation and active intensification of free trade policies led to a reduction in the specific weight of customs duties. In modern conditions, the tax legislation’s unification as well as the strengthening of the supranational tax regulation’s role outline an important trend in the development of taxation systems both in advanced and emerging market economies.

scholarly journals CURRENCY MISMATCHES IN EMERGING MARKET ECONOMIES: IS WINTER COMING?

2020 ◽  
Vol 23 (1) ◽  
pp. 25-54
Author(s):  
Hari Venkatesh ◽  
Gourishankar S Hiremath
Keyword(s):  
Latin American ◽  
Institutional Environment ◽  
Emerging Market ◽  
Trade Openness ◽  
Original Sin ◽  
Emerging Market Economies ◽  
Macroprudential Policy ◽  
Market Economies ◽  
Currency Mismatch ◽  
Currency Mismatches

We develop a currency mismatch index and examine the causes of currency mismatchesin emerging market economies. This study is based on a unique dataset on 22economies from 2008 to 2017. We also construct the original sin index using granulardata on international debt securities. We find Latin American countries, followedby Central European countries, suffer from the original sin and currency mismatchproblems. The panel regression estimates show that country size, trade openness, andthe level of economic and financial development explain cross-country variations incurrency mismatches. Our empirical results suggest that unstable monetary and fiscalpolicies are the primary causes of currency mismatches. The results indicate that abetter institutional environment reduces currency mismatches. These findings call formonetary independence, stable fiscal policy, and macroprudential policy measures tominimize currency mismatches.

scholarly journals The Effects of Inward and Outward Foreign Direct Investments on Economic Growth: Evidence from the G-7 and Selected Emerging Market Economies (1994-2015)

2017 ◽  
Vol 9 (1) ◽  
pp. 26
Author(s):  
Ömer Yalçınkaya ◽  
Halil İbrahim Aydın
Keyword(s):  
Economic Growth ◽  
Capital Mobility ◽  
Emerging Market ◽  
Empirical Literature ◽  
Emerging Market Economies ◽  
Foreign Direct Investments ◽  
Capital Investments ◽  
Market Economies ◽  
New Generation

In this study, the long termed effects of foreign direct (capital) investments inflows and outflows on the economic growth of the economies of developed G-7 countries where the capital mobility is intense and selected emerging market economies (Brazil, China, India, Mexico, Russia, South Africa and Turkey (EME-7)) are empirically analyzed for the period of 1994-2015 within the scope of the new generation panel data methodology. From this aspect, it is also aimed to economically analyze whether the foreign direct investments inflows and outflows in countries of G-7 and EME-7 have an effect on the economic growth as is seen in the theoretical framework by being considered the capital exporter/importer positions of these countries. Determined in consequence of the study that foreign direct investments inflows/outflows in the countries of G-7 have a positive and statistically significant effect on economic growth in the long term. Also determined that the foreign direct investments inflows have a positive and statistically significant effect on economic growth in countries of EME-7; while the foreign direct investments outflows have not the same effect on the economic growth. These results which are consonant with the theoretical and empirical literature show that just both foreign direct investments inflows and outflows have a significant role in economic growth on G-7 countries; just foreign direct investments inflows have an important role in economic growth on EME-7 countries at the same time.

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