Trade and growth at different stages of economic development

Dong-Hyeon Kim, Shu Chin Lin

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32 Citations (Scopus)

Abstract

The paper investigates whether trade openness contributes to long-run economic growth and the effect varies with the level of economic development. We implement this analysis through the instrument-variable threshold regressions approach. The empirical evidence shows that there indeed exists an income threshold above which greater trade openness has beneficial effects on economic growth and below which heightened trade has detrimental consequences. It implies that greater international trade and integration may contribute to more diverging economies. In addition, the relationship of trade with growth is found to work possibly through both investment and productivity growth channels. 2009 Taylor & Francis.

Original languageEnglish
Pages (from-to)1211-1224
Number of pages14
JournalJournal of Development Studies
Volume45
Issue number8
DOIs
Publication statusPublished - 2009 Sep 1
Externally publishedYes

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ASJC Scopus subject areas

  • Development

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