Artikel
Trade openness, income, and role of institutions: A revisit using heterogeneous panel data models
The positive association between trade openness and income has been debated over years due to serious estimation flaws prevailing in the cross-country empirical trade literature. The present paper contributes to this debate by re-examining the long-run relationship between trade openness and income per capita focusing on role of institutions. It does so by estimating a heterogeneous panel data model with 97 countries over the period 1980-2012 taking unobserved common factors into consideration. Our method is a more appropriate approach to estimate this relationship given the potential cross-section dependence and parameter heterogeneity associated with cross-country growth regressions. The results have found evidence to suggest that trade openness is positively and significantly associated with income per capita even after controlling for parameter heterogeneity, cross-section dependence and possible endogeneity. Results further suggest that better quality institutions complement the effects on income underscoring the significance of institutions in benefiting more from trade openness. This study provides more reliable estimates to support the claim that trade openness has significant and robust role on economic growth and development.
- Language
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Englisch
- Bibliographic citation
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Journal: Cogent Economics & Finance ; ISSN: 2332-2039 ; Volume: 3 ; Year: 2015 ; Issue: 1 ; Pages: 1-9 ; Abingdon: Taylor & Francis
- Classification
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Wirtschaft
Economic Growth of Open Economies
Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions
Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
- Subject
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common factor models
cross-section dependence
international trade
economic growth of open economies
- Event
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Geistige Schöpfung
- (who)
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Thennakoon, Jayanthi
Dissanayake, Jagath
- Event
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Veröffentlichung
- (who)
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Taylor & Francis
- (where)
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Abingdon
- (when)
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2015
- DOI
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doi:10.1080/23322039.2015.1020031
- Handle
- Last update
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10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Thennakoon, Jayanthi
- Dissanayake, Jagath
- Taylor & Francis
Time of origin
- 2015
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