Impact of Trade Openness and Human Capital on Economic Growth: A Comparative Investigation of Asian Countries

The aim of this study is to analyze the impact of trade openness and human capital on economic growth in 19 Asian countries from 1985 to 2017. We selected two geographically distributed regions (Western and Southern Asia) based on difference in their GDP per capita. We applied the unit root tests to examine the level of stationarity and found that all variables were integrated at first difference. Kao and Fisher cointegration tests were employed and the results revealed the presence of a long-run relationship. We applied fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS) models to check the magnitude of the long-run coefficients among trade openness, human capital and economic growth. To investigate the direction of causality, we used a Dumitrescu and Hurlin (DH) causality test. The results indicated that trade openness and human capital have a significant and positive relationship while labor force participation has a negative effect on economic growth in Southern Asia, and in the case of Western Asia, the impact is positive. Foreign direct investment (FDI) has a negative and significant impact on GDP per capita (GDPPC) in Western Asia while it is positive and significant in Southern Asia; Total population (TPOP) has a negative impact on GDPPC in both regions. Furthermore, human capital has a positive and significant impact on trade openness in both panels. Meanwhile, labor force participation (LFP) has a positive and significant impact on trade openness in Southern Asia and a negative impact in the case of Western Asia. Trade openness and economic growth have bidirectional causality in Western Asia and unidirectional causality in Southern Asia. It also shows that human capital and economic growth have unidirectional causality in both regions.

Download Full-text

Impacto das exportações de alta tecnologia no crescimento econômico: evidências empíricas do Paquistão

Journal on Innovation and Sustainability RISUS ISSN 2179-3565 ◽

10.24212/2179-3565.2017v8i1p91-105 ◽

2017 ◽

Vol 8 (1) ◽

pp. 91 ◽

Cited By ~ 1

Author(s):

Muhammad Usman

Keyword(s):

Economic Growth ◽

World Bank ◽

Time Span ◽

Least Square ◽

High Tech ◽

Ordinary Least Square ◽

Robust Standard Error ◽

Long Run ◽

Data Source ◽

The Impact

The goal of this study is to explore the impact of high tech exports on economic growth of Pakistan. To examine this relationship, data are collected from World Bank database, State Bank of Pakistan data source and Statistical Bureau of Pakistan. Time span of study is consisting of 20 years from 1995 to 2014. By using ordinary least square (OLS) with robust standard error, results confirm that there is a positive and statistically significant impact of high tech exports on economic growth. Although Pakistan is an agriculture country and its economic growth is largely depend upon farming, but for long run economic growth, Pakistan has to increase its high tech exports.

Download Full-text

Impact of Exchange Rate Management on the Nigerian Economic Growth: Empirical Validation

American International Journal of Economics and Finance Research ◽

10.46545/aijefr.v1i2.68 ◽

2019 ◽

Vol 1 (2) ◽

pp. 28-35

Author(s):

Friday Osaru Ovenseri Ogbomo ◽

Precious Imuwahen Ajoonu

Keyword(s):

Economic Growth ◽

Exchange Rate ◽

Inflation Rate ◽

Government Expenditure ◽

Least Square ◽

Ordinary Least Square ◽

Exchange Rate Management ◽

Long Run ◽

Short Run ◽

The Impact

This paper examined the impact of Exchange Rate Management on economic growth in Nigeria between 1980 and 2015. The study was set to gauge how the management of exchange rate in Nigeria has impacted the economy. The study employed the Ordinary Least Square (OLS) method in its analysis. Co-integration and Error Correction Techniques were used to establish the Short-run and Long-run relationships between economic growth and other relevant economic indicators. The result revealed that exchange rate management proxy by various exchange rates regimes in Nigeria was not germane to economic growth. Rather, government expenditure, inflation rate, money supply and foreign direct investment significantly impact on economic growth in Nigeria. It is against this backdrop that the Nigerian economy must diversify her export base to create room for more inflow of foreign exchange.

Download Full-text

Panel Data Analysis of Financial Development, Trade Openness, and Economic Growth: Evidence from BRICS Countries

Emerging Economy Studies ◽

10.1177/2394901518767023 ◽

2018 ◽

Vol 4 (1) ◽

pp. 1-18 ◽

Cited By ~ 4

Author(s):

Ritu Rani ◽

Naresh Kumar

Keyword(s):

Economic Growth ◽

Trade Openness ◽

Panel Cointegration ◽

Least Square ◽

Cointegration Test ◽

Ordinary Least Square ◽

Brics Countries ◽

Long Run ◽

Panel Granger Causality ◽

Panel Cointegration Test

The purpose of this article is to investigate the possible cointegration and direction of causality between foreign direct investment (FDI) inflow, trade openness, and economic growth in BRICS countries using panel data from 1993 to 2015. Besides these variables, money supply and domestic credit (DC) to private players are also added in the model to examine the impact of financial openness on economic growth. The Pedroni’s panel cointegration test is used to examine the existence of long-run relationship, and coefficients of cointegration are examined by fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS). Further panel Granger causality test is used to examine the direction of causality among the competing variables. The results of Pedroni’s panel cointegration test indicate that there exists a long-run relationship among the variables under considerations in BRICS countries. The coefficient of FMOLS and DOLS indicates that trade openness has a positive impact on economic growth in BRICS countries while FDI inflow has a negative impact in these nations. In addition, the results of panel Granger causality confirmed bidirectional causality between FDI inflow and economic growth in the short run. The study recommends that BRICS countries should liberalize trade openness as it strengthens the position of member countries in the world economy.

Download Full-text

TRADE OPENNESS AND ECONOMIC GROWTH: EMPIRICAL EVIDENCE FROM INDIA

Journal of Business Economics and Management ◽

10.3846/16111699.2012.720587 ◽

2014 ◽

Vol 16 (1) ◽

pp. 188-205 ◽

Cited By ~ 23

Author(s):

Qazi Muhammad Adnan Hye ◽

Wee-Yeap Lau

Keyword(s):

Economic Growth ◽

Human Capital ◽

Granger Causality ◽

Trade Openness ◽

Granger Causality Test ◽

Causality Test ◽

Long Run ◽

Rolling Window ◽

Short Run ◽

The Impact

The main objective of this study is to develop first time trade openness index and use this index to examine the link between trade openness and economic growth in case of India. This study employs a new endogenous growth model for theoretical support, auto-regressive distributive lag model and rolling window regression method in order to determine long run and short run association between trade openness and economic growth. Further granger causality test is used to determine the long run and short run causal direction. The results reveal that human capital and physical capital are positively related to economic growth in the long run. On the other hand, trade openness index negatively impacts on economic growth in the long run. The new evidence is provided by the rolling window regression results i.e. the impact of trade openness index on economic growth is not stable throughout the sample. In the short run trade openness index is positively related to economic growth. The result of granger causality test confirms the validity of trade openness-led growth and human capital-led growth hypothesis in the short run and long run.

Download Full-text

Energy consumption and economic growth in Nigeria

Bussecon Review of Social Sciences (2687-2285) ◽

10.36096/brss.v1i2.138 ◽

2019 ◽

Vol 1 (2) ◽

pp. 01-09

Author(s):

Emeka Nkoro ◽

Nenubari Nenubari Ikue-John ◽

God’sgrace I. Joshua

Keyword(s):

Economic Growth ◽

Renewable Energy ◽

Energy Consumption ◽

Least Square ◽

Electricity Production ◽

Ordinary Least Square ◽

Long Run ◽

Production And Distribution ◽

Short Run ◽

The Impact

This paper investigated this disparity in the literature using Nigeria data from 1980 to 2016. In doing this, energy consumption was disaggregated, and their impacts on economic growth investigated using a modified Ordinary Least Square technique which allows for time gaps in the model. It was observed that only renewable energy impacted on economic growth in the long-run whereas non-renewable energy component impacted on economic growth in the short-run. Therefore, the study sees the impact of energy consumption on economic growth to be indistinct in Nigeria within the period under review. This further buttresses the need for improvement in electricity production and distribution in Nigeria. Given the importance of energy consumption on productivity, the study, therefore, suggests policies/measures that will bring about increasing the supply or improvement of energy production in the country.

Download Full-text

The Effect of Trade Openness on Carbon Dioxide Emission in Taiwan: A Quantile Mediation Analysis

WSEAS TRANSACTIONS ON ENVIRONMENT AND DEVELOPMENT ◽

10.37394/232015.2020.16.43 ◽

2020 ◽

Vol 16 ◽

Keyword(s):

Economic Growth ◽

Carbon Dioxide ◽

Mediation Analysis ◽

Trade Openness ◽

Carbon Dioxide Emission ◽

Point Of View ◽

Least Square ◽

Mediation Effect ◽

Ordinary Least Square ◽

The Impact

This paper adopts an innovative method, called a quantile mediation analysis, which combines a quantile regression and mediation analysis to examine the impact of trade openness on carbon dioxide emission whether through economic growth or not from 1990 to 2018 in Taiwan. The result of the traditional ordinary least square approach shows that Taiwan’s trade openness affects carbon dioxide emission through the full mediation effect of economic growth for the period of 1990-2018 and there is no direct relation between trade openness and carbon dioxide emission. Moreover, the results of this innovative analysis indicate that Taiwan’s trade openness also affects carbon dioxide emission through the full mediation effect of economic growth at any distribution of carbon dioxide emission, and there is no direct effect from trade openness to carbon dioxide emission. This result indicates that trade openness only exists an indirect effect through economic growth in Taiwan. This finding supports Antweiler, Copeland and Taylor’s point of view [1].

Download Full-text

Impacto das exportações de alta tecnologia no crescimento econômico: evidências empíricas do Paquistão

Journal on Innovation and Sustainability RISUS ISSN 2179-3565 ◽

10.24212/2179-3565.2017v8i1p75-89 ◽

2017 ◽

Vol 8 (1) ◽

pp. 75

Author(s):

Muhammad Usman

Keyword(s):

Economic Growth ◽

World Bank ◽

Time Span ◽

Least Square ◽

High Tech ◽

Ordinary Least Square ◽

Robust Standard Error ◽

Long Run ◽

Data Source ◽

The Impact

Download Full-text

Energy and Ecological Sustainability: Challenges and Panoramas in Belt and Road Initiative Countries

Sustainability ◽

10.3390/su10082743 ◽

2018 ◽

Vol 10 (8) ◽

pp. 2743 ◽

Cited By ~ 27

Author(s):

Abdul Rauf ◽

Xiaoxing Liu ◽

Waqas Amin ◽

Ilhan Ozturk ◽

Obaid Rehman ◽

...

Keyword(s):

Economic Growth ◽

Energy Consumption ◽

Co2 Emissions ◽

Trade Openness ◽

Least Square ◽

Belt And Road Initiative ◽

Ordinary Least Square ◽

Long Run ◽

Fixed Capital Formation ◽

Belt And Road

Innovation and globalization fosters a tendency towards multiparty collaboration and strategic contacts among nations. A similar path was followed by the Chinese administration in 2013, with its “Belt and Road Initiative” (BRI). The most important objective of the present fact-finding study was to demonstrate the links between economic growth, energy consumption, urbanization, gross fixed capital formation, trade openness, financial development and carbon emissions (ecological degradation) from a panel of 47 BRI economies, over a time span of 1980 to 2016. Dynamic panel estimations (dynamic ordinary least square (DOLS) and fully modified ordinary least square (FMOLS)) were engaged to examine the long-run links between the subjected variables. Synchronized outcomes for the full panel show that energy consumption, gross fixed capital formation, economic growth, financial development, and urbanization unfavorably led to environmental degradation (CO2 emissions). However, trade openness is negatively correlated with emissions. Furthermore, pairwise panel Granger causative estimations justified bi-directional links from all regressors towards CO2 emissions, except for trade openness, which had unidirectional ties with environmental quality. In cross-country, long-run assessments, different results were found, with CO2 emissions being greatly increased by economic growth in all countries and energy consumption in 30 countries; other predictors testified to some mixed interactions with CO2 emissions in the country-level examination. The reported investigation provides some noteworthy guiding principles and policy inferences aimed at governments and ecological supervisory administrations, suggesting assertive moves towards truncated used of carbon fossil fuels and dependency on renewable energy, establishing waste and water treatment plants, familiarizing themselves with the concept of a green economy, and making the general public aware of eco-friendly investments in BRI economies.

Download Full-text

Banking Sector Development, Inflation and Economic Growth in Asian Countries: A Panel Causality and Co-Integration Approach

International Journal of Accounting and Financial Reporting ◽

10.5296/ijafr.v8i4.14046 ◽

2018 ◽

Vol 8 (4) ◽

pp. 384

Author(s):

Muhammad Imran Nazir ◽

Rehana Tabassam ◽

Ifran Khan ◽

Muhammad Rizwan Nazir

Keyword(s):

Economic Growth ◽

Banking Sector ◽

Vital Role ◽

Least Square ◽

Policy Implications ◽

Asian Countries ◽

Ordinary Least Square ◽

Long Run ◽

Banking Sector Development ◽

Integration Test

This study investigates the causal relationship between banking sector development, inflation, and economic growth for six Asian countries (Bangladesh, China, India, Malaysia, Pakistan and Sri Lanka) over the period of 1970-2016. Using a Pedroni panel, Kao co-integration test, Panel Granger causality-based Error Correction Model, Dynamic ordinary least square (DOLS), and Fully modified ordinary least square (FMOLS), this study finds that the development of the banking sector generally has a positive relationship with economic growth in the long-run. This results show that in the long-run, monetary policy play a vital role in the economic growth. This study also confirmed the response causality between the indicators of banking sector development and economic growth. Based on the empirical findings, this research provides important policy implications to the banking sector and economic supervisory bodies in order to achieve the long run economic growth.

Download Full-text

Macroeconomic determinants of trade openness: empirical investigation of SAARC region

Journal of Asia Business Studies ◽

10.1108/jabs-12-2015-0207 ◽

2018 ◽

Vol 12 (2) ◽

pp. 151-161 ◽

Cited By ~ 2

Author(s):

Muhammad Tahir ◽

SAF Hasnu ◽

Mario Ruiz Estrada

Keyword(s):

Regional Cooperation ◽

Labour Force ◽

Trade Openness ◽

Least Square Method ◽

Least Square ◽

Content Type ◽

Currency Exchange ◽

Long Run ◽

Macroeconomic Determinants ◽

The Impact

Purpose Trade openness plays a significant role in the growth process of countries. The purpose of this paper is to examine the impact of macroeconomic determinants on the trade openness of countries. Design/methodology/approach The study focuses on the South Asian Association for Regional Cooperation (SAARC) member countries and the data used were from 1971 to 2011. Panel data econometrics techniques and two stages least square method (TSLS) are used to carry out empirical analysis and robustness testing. Findings The main finding of the paper is that macroeconomic determinants such as investment both in physical and human capital and per capita gross domestic product (GDP) positively affect trade openness. Further, the size of labour force and currency exchange rate has also impacted trade openness negatively and significantly. Practical implications It implies that efficient macroeconomic management matters for higher trade openness. The sampled developing countries are suggested to pay favourable attention to macroeconomic variables if they want to grow in the long run through outward-oriented policies. Originality/value This paper is an original contribution in the context of SAARC countries by focusing on the relationship between macroeconomic determinants and trade openness.

Download Full-text