Impact of Trade Openness on Economic Growth in Emerging Economies: A Panel Data Analysis

2021 ◽  
Vol 9 (2) ◽  
pp. 210-216
Author(s):  
Muhammad Atiq Ur Rehman ◽  
Ruqia Shaheen ◽  
Farzana Munir
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Panel Data ◽  
Emerging Economies ◽  
Panel Data Analysis ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Developed Countries ◽  
Export Promotion ◽  
Promotion Strategies

The role of international trade in boosting economic growth is imperative in the era of globalization and trade liberalization. A trade openness policy can help stimulate economic growth mainly in two ways. Firstly, technology is transferred from developed countries to developing countries through imports. Secondly, the export promotion strategies facilitate the innovations and inventions promoting competition among the producers. In this way, research-intensive specialization culture is flourished in developing countries. This study aims at examining the effect of global trade orientation on growth in 23 emerging economies for the period 1995-2018. The panel data estimation approach including fixed effect and generalized method of moments (GMM) reveal a positive and statistically significant influence of trade openness on economic growth.  The empirical results are robust to the various specifications, supporting the trade-led growth notion in the economies under consideration. The emerging economies can achieve higher growth rates through trade openness and export promotion strategies.

scholarly journals Service Export Sensitivity to Internet Adoption: Evidence From Dynamic Panel Data Analysis

2020 ◽  
Vol 11 (6) ◽  
pp. 259
Author(s):  
Walid Chatti ◽  
Haitham Khoj
Keyword(s):  
Developing Countries ◽  
Panel Data ◽  
Panel Data Analysis ◽  
Developed Countries ◽  
Dynamic Panel Data ◽  
Dynamic Panel ◽  
Internet Adoption ◽  
The Impact ◽  
Dynamic Panel Data Analysis ◽  
Service Export

This study aims to examine the causal linkages relating service exports to internet penetration for 116 countries over the period 2000-2017. Taking into account a wide panel of countries, we apply 2-Step GMM methodology for dynamic panel data models. The results show a bi-directional causality relating service exports to internet adoption for developed countries. For the global panel and developing countries, we find those same results attest a positive relationship between the internet adoption and service exports, but in the opposite way; the impact is very low and not significant. Regarding developing countries, despite the fact that internet positively affects service exports, it is considered less efficient than in developed countries.

Wage- and profit-led growth regimes: a panel-data approach

2021 ◽  
Vol 9 (3) ◽  
pp. 394-412
Author(s):  
Guilherme de Oliveira ◽  
Eduardo Prado Souza
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Panel Data ◽  
Latin American ◽  
Structural Characteristics ◽  
Developed Countries ◽  
Domestic Investment ◽  
Growth Regime ◽  
Investment Function ◽  
Trade Channel

The extensive empirical effort made in the growth and distribution literature to estimate whether economic growth is wage- or profit-led has not sufficiently considered the theoretical foundation of the Neo-Kaleckian model. This paper attempts to respect key tenets of the investment function by estimating a panel-data model in which country-specific structural characteristics and possible endogenous relationships in income distribution and economic growth are explicitly considered. The identification strategy is based on several estimates of the capital stock and the rate of capacity utilization for 61 countries over the period between 1995 and 2014. The main results suggest that the growth regime was wage-led in developed countries, while most developing countries exhibited a profit-led growth regime. Interestingly, however, while the profit-led regime occurs through the international trade channel in Latin American countries, in other developing countries, the causality channel is mainly related to the domestic investment function.

Determinants of Industrial Development

2021 ◽  
pp. 378-406
Author(s):  
Fiona Tregenna ◽  
Kevin Nell ◽  
Chris Callaghan
Keyword(s):  
Developing Countries ◽  
Human Capital ◽  
Exchange Rate ◽  
Panel Data ◽  
Industrial Development ◽  
Trade Openness ◽  
Developed Countries ◽  
Government Consumption ◽  
Capital Account Liberalization ◽  
Exchange Rate Depreciation

Global evidence suggests that, for many countries, manufacturing typically has an inverted U-shaped relationship with development. But unlike the historical experience of most developed countries, for most developing countries the turning point of this relationship is occurring sooner in the development process, and at substantially lower levels of income. This is termed ‘premature deindustrialization’. The consequences of this may be particularly important if such countries can no longer rely on manufacturing-led development. Why are some countries more industrialized, or more deindustrialized, than other comparable countries? To explore these issues, this chapter uses panel-data econometric techniques to analyse the determinants of the share of manufacturing in GDP, across countries and across time. Domestic determinants include investment, government consumption, population size, human capital, democracy, and natural resource endowments. External determinants include trade openness, capital account liberalization, and exchange rate depreciation.

Determinants of FDI in developed and developing countries: a quantitative analysis using GMM

2018 ◽  
Vol 45 (2) ◽  
pp. 348-382 ◽  
Author(s):  
Neha Saini ◽  
Monica Singhania
Keyword(s):  
Developing Countries ◽  
Panel Data ◽  
Multinational Corporations ◽  
Management Practices ◽  
Panel Data Analysis ◽  
Random Effect ◽  
Trade Openness ◽  
Content Type ◽  
Generalized Moments ◽  
Determinants Of Fdi

PurposeThe purpose of this paper is to investigate the potential determinants of FDI, in developed and developing countries.Design/methodology/approachThis paper investigates FDI determinants based on panel data analysis using static and dynamic modeling for 20 countries (11 developed and 9 developing), over the period 2004-2013. For static model estimations, Hausman (1978) test indicates the applicability of fixed effect/random effect, while generalized moments of methods (GMM) (dynamic model) is used to capture endogeneity and unobserved heterogeneity.FindingsThe outcome across different countries depicts diverse results. In developed countries, FDI seeks policy-related determinants (GDP growth, trade openness, and freedom index), and in developing country FDI showed positive association for economic determinants (gross fixed capital formulation (GFCF), trade openness, and efficiency variables).Research limitations/implicationsThe destination of FDI is limited to 20 countries in the present paper. The indicator of the institutional environment, namely economic freedom index, used in this paper has received some criticism in calculations.Practical implicationsThe paper enlists recommendations for future FDI policies and may assist government in providing a tactical framework for skill development, thereby increasing manufacturing growth rate. The paper also throws light on vertical and horizontal capital inflows considering resource, strategy, and market-seeking FDI.Social implicationsFDI may bring significant benefits by creating high-quality jobs, introducing modern production and management practices. It highlights how multinational corporations and government contribute to better working conditions in host countries.Originality/valueThe paper uncovers important features like macroeconomic variables, especially country-wise efficiency scores, policy variables, GFCF, and freedom index, for determining FDI inflows in 20 countries using panel data methods and provides a roadmap for developed and developing countries. The study highlights endogeneity and unobserved heteroscedasticity by applying GMM one- and two-step procedure.

scholarly journals How do Globalization, Technological Change and Employment Impact Economic Growth in Developing Countries? Evidence from Panel Data Analysis

2018 ◽  
Vol 1 (1) ◽  
pp. 39-49
Author(s):  
Fatima Saleem ◽  
Fatima Farooq ◽  
Imran Sharif Chaudhry ◽  
Noreen Safdar
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Developing Economies ◽  
Panel Data Analysis ◽  
Trade Openness ◽  
Causality Analysis ◽  
Causality Test ◽  
Panel Ardl ◽  
Long Run ◽  
The Impact

This study aims at exploring the impact of globalization, technology and employment on economic growth of developing economies. This study also observed the long-run, short-run and causality relationships between globalization, technological innovations, employment, and economic growth for 20 selected developing countries covering the data for period of 1991 to 2017.  Since stationary of variables is examined through ADF tests, Levin-Lin-Chu test, and IM-Pesaran-Shin test and resulted with mixed order of integration, Panel ARDL estimation techniques are employed to measure the long run effects of these variables on growth of selected economies. Dumitrescu-Hurlin panel Granger Causality test was applied for causality analysis. All variables have strong positive and significant relationship with growth. This study concluded that knowledge and research-based education have a key role in promoting long-run growth as evident from the ‘New growth theory’ of Romer. On the basis of these results, it is suggested that knowledge and research-based education should be promoted and export-oriented policies should also be encouraged to attain benefits of trade openness and globalization for accelerating economic growth on sustainable basis.

scholarly journals The impact of taxes effects on the economic growth of developing countries in ASIA

2020 ◽  
Author(s):  
Văn Thuận Nguyễn ◽  
Xuân Hằng Trần ◽  
Minh Hằng Nguyễn ◽  
Thị Kim Chi Ng
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Method Of Moments ◽  
Positive Impact ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Negative Relationship ◽  
Estimation Methods ◽  
Policy Suggestions ◽  
The Impact

The objective of the study is to examine the impact of taxes on economic growth in developing countries in Asia during 18-year period (2000-2017). Using the estimation methods of OLS, FEM, REM, GLS and two-step system generalized method of moments (S-GMM) for panel data. Empirical results show that taxation has a positive impact on economic growth at level of 1%, while the most studies consider this to be a negative relationship. Besides, factors such as government spending, trade openness, inflation also have a significant impact on economic growth. On that basis, the study provides some policy suggestions for tax policies in these countries.

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