On exports and economic growth
TL;DR: In this article, the authors analyzed the sources of growth in the period 1964-1973 for a group of semi-industrialized less developed countries and developed an analytical framework, incorporating the possibility that marginal factor productivities are not equal in the export and non-export sectors of the economy.
About: This article is published in Journal of Development Economics.The article was published on 1983-02-01. It has received 1714 citations till now. The article focuses on the topics: Economic sector & Export performance.
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TL;DR: This paper found that trade has a quantitatively large and robust, though only moderately statistically significant, positive effect on income and that countries' geographic characteristics have important effects on trade, and are plausibly uncorrelated with other determinants of income.
Abstract: Examining the correlation between trade and income cannot identify the direction of causation between the two. Countries’ geographic characteristics, however, have important effects on trade, and are plausibly uncorrelated with other determinants of income. This paper therefore constructs measures of the geographic component of countries’ trade, and uses those measures to obtain instrumental variables estimates of the effect of trade on income. The results provide no evidence that ordinary least-squares estimates overstate the effects of trade. Further, they suggest that trade has a quantitatively large and robust, though only moderately statistically significant, positive effect on income. (JEL F43, 040)
5,537 citations
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TL;DR: The authors examined whether the conclusions from existing studies are robust or fragile to small changes in the conditioning information set and found a positive, robust correlation between growth and the share of investment in GDP and between investment share and the ratio of international trade to GDP.
Abstract: A vast literature uses cross-country regressions to search for empirical linkages between long-run growth rates and a variety of economic policy, political, and institutional indicators. This paper examines whether the conclusions from existing studies are robust or fragile to small changes in the conditioning information set. The authors find that almost all results are fragile. They do, however, identify a positive, robust correlation between growth and the share of investment in GDP and between the investment share and the ratio of international trade to GDP. The authors clarify the conditions under which there is evidence of per capita output convergence.
5,263 citations
TL;DR: This paper found little evidence that open trade policies are significantly associated with economic growth, in the sense of lower tariff and nontariff barriers to trade, and showed that the indicators of openness used by researchers are poor measures of trade barriers or are highly correlated with other sources of bad economic performance.
Abstract: Do countries with lower policy-induced barriers to international trade grow faster, once other relevant country characteristics are controlled for? There exists a large empirical literature providing an affirmative answer to this question. We argue that methodological problems with the empirical strategies employed in this literature leave the results open to diverse interpretations. In many cases, the indicators of openness used by researchers are poor measures of trade barriers or are highly correlated with other sources of bad economic performance. In other cases, the methods used to ascertain the link between trade policy and growth have serious shortcomings. Papers that we review include those by Dollar (1992), Ben-David (1993), Sachs and Warner (1995), Edwards (1998), and Frankel and Romer (1999). We find little evidence that open trade policies-in the sense of lower tariff and nontariff barriers to trade-are significantly associated with economic growth.
2,706 citations
TL;DR: The authors examined the cross-sectional relation between the mean growth rate of real product (growth) and variables suggested by the theoretical literature and found that Barro's hypothesis that the variability of monetary shocks adversely affects growth receives strong support.
1,713 citations
TL;DR: This article examined the role of foreign direct investment in the growth process in the context of developing countries characterized by differing trade policy regimes, and found that the beneficial effect of FDI, in terms of enhanced economic growth, is stronger in those countries that pursue all outwardly oriented trade policy than it is in countries adopting an inwardly oriented policy.
Abstract: This paper examines, within a new growth theory framework, the role that foreign direct investment plays in the growth process in the context of developing countries characterized by differing trade policy regimes. The paper tests, using cross-section data relating to a sample of forty-six developing countries, the hypothesis advanced by Jagdish Bhagwati, according to which the beneficial effect of foreign direct investment, in terms of enhanced economic growth, is stronger in those countries that pursue all outwardly oriented trade policy than it is in those countries adopting an inwardly oriented policy. Copyright 1996 by Royal Economic Society.
1,578 citations
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TL;DR: In this article, the relationship between exports and economic growth in 11 developing countries that have already established an industrial base was analyzed, adjusting for domestic and foreign investment and for increases in the labor force that affect total exports.
1,427 citations
800 citations
TL;DR: In this article, the empirical relationship between economic growth and export expansion in developing countries as observed through an intercountry cross-section was analyzed, and the results indicated that export performance was important, along with capital formation, in explaining the intercountry variance in GDP growth rates during the 1960-1977 period.
704 citations
TL;DR: In this article, the authors focus on the question: what difference does the set of commercial policies chosen by a developing country make to its rate of economic growth, and the empirical evidence overwhelmingly indicates that there are important links between them.
Abstract: My topic is the question: what difference does the set of commercial policies chosen by a developing country make to its rate of economic growth? Three points are salient. First, in its present state, trade theory provides little guidance as to the role of trade policy and trade strategy in promoting growth. Second, the empirical evidence overwhelmingly indicates that there are important links between them. Third, a number of hypotheses as to the reasons for these links have been put forward, but there is not as yet sufficient evidence to enable us to estimate their relative importance.
405 citations
391 citations