Analysis of Trade-Growth Nexus

2014 ◽  
pp. 247-271
Keyword(s):  
Economic Growth ◽  
Growth Rates ◽  
World Trade ◽  
Trade Openness ◽  
Growth Effects ◽  
Positive Growth ◽  
Trade Growth ◽  
The Impact ◽  
Global Growth ◽  
Trade And Growth

This chapter delves deeper into the controversial trade-growth debate – controversial because empirical evidence has provided a wide variety of findings, although one of the stylized facts of global growth is that economies which have opened-up for trade have grown very strongly. The focus is China, the regional and international trade-giant, with an objective of analyzing the impact of trade on economic growth. The motivation of this chapter is due to a number of reasons. First, as stated above, while theoretical economists broadly converge to the agreement that trade has positive growth effects (with various conditionalities), empirical findings have been conflicting. Second, these conditions and other important issues surrounding trade openness are important and must be adequacy explored. Third, the Chinese (or Asian economies) data provides the best grounds of experimenting on both trade and growth, especially in the era when they dominate both world trade and growth rates. And finally, this chapter is an application of the extension developed by Rao and Singh (2007) for estimating the impact of trade openness on economic growth of China.

Economic Growth and Macro Variables in India: An Empirical Study

2015 ◽  
pp. 42-59
Author(s):  
Saba Ismail ◽  
Shahid Ahmed
Keyword(s):  
Economic Growth ◽  
Growth Rates ◽  
Trade Openness ◽  
Capital Formation ◽  
Gdp Growth ◽  
Fdi Inflows ◽  
Domestic Capital ◽  
The Government ◽  
Macro Variables ◽  
Determinants Of Economic Growth

The research objective of this paper is to explore the empirical linkages between economic growth and foreign direct investment (FDI), gross fixed capital formation (GFCF) and trade openness in India (TOP) over the period 1980 to 2013. The study reveals a positive relationship between economic growth and FDI, GFCF and TOP. This study establishes a strong unidirectional causal flow from changes in FDI, trade openness and capital formation to the economic growth rates of India. The impulse response function traces the positive influence of these macro variables on the GDP growth rates of India. The study also reveals that the volatility of GDP growth rates in India is mainly attributed to the variation in the level of GFCF and FDI. The study concludes that the FDI inflows and the size of capital formation are the main determinants of economic growth. In view of this, it is expected that the government of India should provide more policy focus on promoting FDI inflows and domestic capital formations to increase its economic growth in the long-term.

The world economy

1998 ◽  
Vol 165 ◽  
pp. 35-42
Author(s):  
Nigel Pain
Keyword(s):  
Capital Market ◽  
World Trade ◽  
Global Economy ◽  
World Economy ◽  
Domestic Demand ◽  
The World ◽  
Asian Economies ◽  
Trade Growth ◽  
The Impact ◽  
The Capital Market

Developments in the Asian economies have clearly begun to be felt in the wider global economy in recent months. It has always been expected that the OECD economies would be affected by the aftermath of the capital market turmoil last year, although the timing and magnitude of the impact was difficult to predict. Domestic demand in the affected Asian economies has proved much weaker than expected, with the effects magnified by a continued downturn in Japan. GDP fell by 5¾ per cent in Korea in the first quarter of this year and by 1¼ per cent in Japan. The aggregate volume of merchandise imports in Asia is expected to decline by around 5½ per cent this year, with falls of up to 25 per cent in countries such as Korea, Thailand and Indonesia. This largely accounts for our projected decline in world trade growth to under 6 per cent this year from an estimated 9¾ per cent in 1997.

scholarly journals Impact of foreign direct investment on economic growth in the world during 1975–2015

2018 ◽  
Vol 20 (91) ◽  
pp. 28-32
Author(s):  
B. B. Brychka
Keyword(s):  
Economic Growth ◽  
Literature Review ◽  
Regression Models ◽  
Trade Openness ◽  
Positive Influence ◽  
Linear Regression Models ◽  
Average Value ◽  
Gdp Growth Rate ◽  
The World ◽  
The Impact

The study is concentrated on examination the impact of FDI on economic growth in the World during 1975–2015. The study consists of four consecutive parts, including introduction, literature review, model and methodology, data, empirical results and conclusion. Each part of the study is focused on its own goals. According to the results of the literature review, there is positive influence of FDI on economic growth in various countries. Economic growth is one of the most important goals of any country. The country image on the international level is dependent on its economic power. Economic growth provides an opportunity to improve the living standards in the country. Most researchers conclude that there is a positive influence of FDI on the countries’ economic growth. However, the impact of FDI is strong in developing countries. Moreover, this relationship is stronger in countries with higher educational and technological level, trade openness and development of the countries’ stock markets. Economists often build regression models to estimate the relationship between the variables. In order to find the impact of FDI on economic growth, we are going to apply linear regression models. We take two variables as indicators of the countries’ economic growth, including current GDP expressed in U.S dollars, and annual GDP growth rate. Taking into account that the World’s GDP in current U.S dollar is a factor variable with the mentioned resulting variables, the regression equation looks as follows: The R-squared of the built model is 0.99, indicating that roughly 100% of changes in the World’s GDP is caused by the chosen factors. As it is seen from the SAS output, the residuals of dependent variable and factors variables are distributed normally among its average value. Thus, non-normality is not observed in the model. Taking into account the coefficients of the factor variables, the log GDP is most sensitive to the changes in trade as a percent of GDP. The log GDP is not quite sensitive to the changes in FDI, since the coefficient of 0.000128 means that increasing of FDI by one unit increase the logarithmic value of GDP by $ 0.000128.

scholarly journals Economic Growth of Asia Pacific Countries

2018 ◽  
Vol 2 (1) ◽  
pp. 52-60
Author(s):  
Nabaz T. Khayyat ◽  
Sherwan Kafoor
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Trade Openness ◽  
Government Expenditure ◽  
Asia Pacific ◽  
Tax Rate ◽  
Education And Health ◽  
Fixed Capital Formation ◽  
Main Driver ◽  
The Impact

This empirical study examines the determinant of economic growth among Asia Pacific countries. While many other studies focused on specific economies with particular determinants identified from previous studies, this study expands the boundaries of countries to examine different factors that are expected to affect the economic growth in Asia Pacific countries. Estimation results of this study are based on the analysis of a panel data for the period 1994–2011. The impact of total population, industry share of GNI, interest rate, gross fixed capital formation, and tax rate are statistically examined to be strongly significant for the whole sample. In the case of government expenditure and trade openness, they are examined to be significant to some degree. Finally, though human capital is expected to be the main driver of economic growth, the result from correlation analysis revealed that there is a high correlation between expenditure on education and health. To show the impact of human capital on economic growth in Asia Pacific countries, estimation with years of schooling may enhance the study instead of using expenditure on education and health.

scholarly journals The Impact of Industrialization, Trade Openness, Financial Development, and Energy Consumption on Economic Growth in Indonesia

Economies ◽  
2021 ◽  
Vol 9 (4) ◽  
pp. 174
Author(s):  
Khalid Eltayeb Elfaki ◽  
Rossanto Dwi Handoyo ◽  
Kabiru Hannafi Ibrahim
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Least Squares ◽  
Financial Development ◽  
Correction Term ◽  
Trade Openness ◽  
Ordinary Least Squares ◽  
Distributed Lag ◽  
Long Run ◽  
The Impact

This study aimed to scrutinize the impact of financial development, energy consumption, industrialization, and trade openness on economic growth in Indonesia over the period 1984–2018. To do so, the study employed the autoregressive distributed lag (ARDL) model to estimate the long-run and short-run nexus among the variables. Furthermore, fully modified ordinary least squares (FMOLS), dynamic least squares (DOLS), and canonical cointegrating regression (CCR) were used for a more robust examination of the empirical findings. The result of cointegration confirms the presence of cointegration among the variables. Findings from the ARDL indicate that industrialization, energy consumption, and financial development (measured by domestic credit) positively influence economic growth in the long run. However, financial development (measured by money supply) and trade openness demonstrate a negative effect on economic growth. The positive nexus among industrialization, financial development, energy consumption, and economic growth explains that these variables were stimulating growth in Indonesia. The error correction term indicates a 68% annual adjustment from any deviation in the previous period’s long-run equilibrium economic growth. These findings provide a strong testimony that industrialization and financial development are key to sustained long-run economic growth in Indonesia.

scholarly journals PENGARUH PEMBANGUNAN INFRASTRUKTUR TELEKOMUNIKASI TERHADAP PERTUMBUHAN EKONOMI DI ASEAN

2019 ◽  
Vol 4 (1) ◽  
Author(s):  
Galih adi Prasetyo
Keyword(s):  
Economic Growth ◽  
Trade Openness ◽  
Dynamic Panel Data ◽  
Infrastructure Development ◽  
Method Of Moment ◽  
Telecommunications Infrastructure ◽  
Telecommunication Infrastructure ◽  
Asean Countries ◽  
Urbanization Rate ◽  
The Impact

Abstract This study aims to determine the effect of the development of telecommunications infrastructure to economic growth in ASEAN. Generalized Method of Moment (GMM) is used to test how telecommunication infrastructure development to economic growth in ASEAN. This study uses a dynamic panel data from 10 ASEAN countries in the period 2000-2013. Variables used in this research is the GDP growth, the development of telecommunication infrastructure index, foreign direct investment, trade openness, and urbanization rate. Tests were performed using STATA 13.0 software shows the use sys-GMM better than diff-GMM. The results of this study indicate the development of telecommunications infrastructure significantly affect economic growth but had negative relationships. Based on the theory of demand following hypothesis (DFH) economic growth leads to the development of telecommunications infrastructure. The impact of telecommunications infrastructure development is only emerge through the product or outcome of economic growth. Telecommunications infrastructure development is considered as the impact of economic growth continues to increase.

Evaluating the impact of changes in human capital structure on Russia's economic growth dynamics

2021 ◽  
Vol 20 (2) ◽  
pp. 200-222
Author(s):  
Roman M. MEL'NIKOV ◽  
Valentina A. TESLENKO
Keyword(s):  
Higher Education ◽  
Economic Growth ◽  
Growth Rates ◽  
Fixed Effects ◽  
Growth Dynamics ◽  
High Tech ◽  
Fixed Effects Model ◽  
Long Term Effects ◽  
Academic Degree ◽  
The Impact

Subject. The article explores the impact of changes in the educational structure of the employed population on the dynamics of economic growth. Objectives. The purpose is to evaluate the impact of changes in the share of employed persons, having secondary vocational and higher education, and researchers with academic degree on the growth rates of the Russian economy. Methods. The study employs the regression analysis of panel data of Russian regions, the specification with a quadratic dependence of economic growth rates on the share of employed persons, having the higher education and secondary vocational education. A fixed-effects model is used to analyze the short-term effects, the sustainability of results, and long-term effects, using the pool models and random effects models. Results. The increase in the share of researchers with academic degree has a positive and significant effect on economic growth, but only if adequate R&D funding is provided. The increase in the share of employed persons with higher education up to thirty percent is accompanied by an increase in the growth rate of real GRP in the long run, however, further expansion of higher education has no positive effect on economic growth. Conclusions. A powerful form of personnel training for Russian high-tech companies is a special model of ‘industrial postgraduate training’, which involves the collaboration of universities with industrial partners.

scholarly journals Trade Openness and Economic Growth Nexus: A Case Study of BRICS

2018 ◽  
Vol 54 (1) ◽  
pp. 1-15 ◽  
Author(s):  
L. G. Burange ◽  
Rucha R. Ranadive ◽  
Neha N. Karnik
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Causal Relationship ◽  
Trade Openness ◽  
Gdp Per Capita ◽  
Jel Codes ◽  
Per Capita ◽  
The Impact ◽  
Econometric Technique

The article analyses a causal relationship between trade openness and economic growth for the member countries of BRICS by using an econometric technique of time series analysis. Member countries of BRICS adopted a series of liberalization reforms, almost simultaneously, from the late 1980s. The article attempts to study the impact of trade openness on their growth in GDP per capita. It captures structural composition of GDP and openness of trade in four aspects, that is, merchandise exports, merchandise imports, services export and services import. In India, the study found growth-led trade in services hypothesis. The article supports the growth-led export and growth-led import hypothesis for China and export- and import-led growth for South Africa. However, no causal relationship was evident for Brazil and Russia. JEL Codes: F43, C22

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