IDEAS home Printed from https://ideas.repec.org/a/jns/jbstat/v226y2006i2p115-138.html
   My bibliography  Save this article

The Degree of Openness to Intra-Regional Trade - Towards Value-Added Based Openness Measures

Author

Listed:
  • Belke Ansgar

    (Chair of International Economics, University of Hohenheim, D-70593 Stuttgart, Germany)

  • Wang Lars

    (Dir. oec. Department of Economics, University of Hohenheim, D-70593 Stuttgart, Germany)

Abstract

This study develops innovative measures of openness towards bilateral trade. The most widely applied openness indices are not able to accurately calculate the degree of trade openness. For example, the intra-regional export ratio which relates the value of exports of an integration area to the gross domestic product, can exceed 100 percent because trade is stated in gross terms, while the gross domestic product is expressed in value-added terms. This implies a negative value of domestic non-tradeables. The actual openness concept corrects the traditional concept by expressing trade in value-added terms instead of gross terms.

Suggested Citation

  • Belke Ansgar & Wang Lars, 2006. "The Degree of Openness to Intra-Regional Trade - Towards Value-Added Based Openness Measures," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 226(2), pages 115-138, April.
    • Handle: RePEc:jns:jbstat:v:226:y:2006:i:2:p:115-138
    DOI: 10.1515/jbnst-2006-0202
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/jbnst-2006-0202
    Download Restriction: no
    File URL: https://libkey.io/10.1515/jbnst-2006-0202?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Spilimbergo, Antonio & Londono, Juan Luis & Szekely, Miguel, 1999. "Income distribution, factor endowments, and trade openness," Journal of Development Economics, Elsevier, vol. 59(1), pages 77-101, June.
    2. Greenaway, David & Foster, Neil, 2002. "North-South Trade, Knowledge Spillovers and Growth," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 17, pages 650-670.
    3. Jeffrey A. Frankel & David Romer, 1996. "Trade and Growth: An Empirical Investigation," NBER Working Papers 5476, National Bureau of Economic Research, Inc.
    4. Edward E. Leamer, 1988. "Measures of Openness," NBER Chapters, in: Trade Policy Issues and Empirical Analysis, pages 145-204, National Bureau of Economic Research, Inc.
    5. Falvey, Rod & Gemmell, Norman, 1999. "Factor endowments, nontradables prices and measures of 'openness'," Journal of Development Economics, Elsevier, vol. 58(1), pages 101-122, February.
    6. Harrison, Ann, 1996. "Openness and growth: A time-series, cross-country analysis for developing countries," Journal of Development Economics, Elsevier, vol. 48(2), pages 419-447, March.
    7. Michael M. Knetter & Matthew J. Slaughter, 2001. "Measuring Product-Market Integration," NBER Chapters, in: Topics in Empirical International Economics: A Festschrift in Honor of Robert E. Lipsey, pages 15-46, National Bureau of Economic Research, Inc.
    8. Blomstrom, Magnus & Goldberg, Linda S. (ed.), 2001. "Topics in Empirical International Economics," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226060835.
    9. repec:fth:oxesaf:2001-10 is not listed on IDEAS
    10. Magnus Blomstrom & Linda S. Goldberg, 2001. "Topics in Empirical International Economics: A Festschrift in Honor of Robert E. Lipsey," NBER Books, National Bureau of Economic Research, Inc, number blom01-1.
    11. Edwards, Sebastian, 1998. "Openness, Productivity and Growth: What Do We Really Know?," Economic Journal, Royal Economic Society, vol. 108(447), pages 383-398, March.
    12. Chen, Been-Lon, 1999. "Trade Openness and Economic Growth: Evidence in East Asia and Latin America," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 14, pages 265-295.
    13. Romain Wacziarg, 2001. "Measuring the Dynamic Gains from Trade," The World Bank Economic Review, World Bank, vol. 15(3), pages 393-39-429.
    14. Lloyd, P. J. & MacLaren, D., 2002. "Measures of trade openness using CGE analysis," Journal of Policy Modeling, Elsevier, vol. 24(1), pages 67-81, March.
    15. Pritchett, Lant, 1996. "Measuring outward orientation in LDCs: Can it be done?," Journal of Development Economics, Elsevier, vol. 49(2), pages 307-335, May.
    16. Robert E. Baldwin, 1988. "Trade Policy Issues and Empirical Analysis," NBER Books, National Bureau of Economic Research, Inc, number bald88-2.
    17. Måns Söderbom & Francis Teal, 2001. "Trade and human capital as determinants of growth," CSAE Working Paper Series 2001-10, Centre for the Study of African Economies, University of Oxford.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guillaume Daudin & Christine Rifflart & Danielle Schweisguth, 2011. "Who produces for whom in the world economy?," Canadian Journal of Economics, Canadian Economics Association, vol. 44(4), pages 1403-1437, November.
    2. repec:hal:wpspec:info:hdl:2441/5l6uh8ogmqildh09h4dj9499g is not listed on IDEAS
    3. Susanne Mueller‐Using & Wieslaw Urban & Jan Wedemeier, 2020. "Internationalization of SMEs in the Baltic Sea Region: Barriers of cross‐national collaboration considering regional innovation strategies for smart specialization," Growth and Change, Wiley Blackwell, vol. 51(4), pages 1471-1490, December.
    4. repec:spo:wpecon:info:hdl:2441/5l6uh8ogmqildh09h4dj9499g is not listed on IDEAS
    5. Abo-Zaid Salem M, 2011. "The Trade-Growth Relationship in Israel Revisited: Evidence from Annual Data, 1960-2004," Review of Middle East Economics and Finance, De Gruyter, vol. 6(3), pages 63-93, February.
    6. Bouwmeester, Maaike C. & Oosterhaven, Jan & Rueda-Cantuche, Jos, 2014. "Measuring the EU value added embodied in EU foreign exports by consolidating 27 national supply and use tables for 2000-2007," Research Report 14004-EEF, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    7. repec:hal:spmain:info:hdl:2441/5l6uh8ogmqildh09h4dj9499g is not listed on IDEAS
    8. repec:dgr:rugsom:14004-eef is not listed on IDEAS
    9. Saleh Mothana Obadi, 2007. "Regionálna integrácia a intra-regionálny obchod: komparatívna analýza [Regional integration and intra-regional trade: a comparative analysis]," Politická ekonomie, Prague University of Economics and Business, vol. 2007(1), pages 41-59.
    10. repec:spo:wpmain:info:hdl:2441/5l6uh8ogmqildh09h4dj9499g is not listed on IDEAS
    11. Jingyi Wang & Shuguang Liu & Yubin Zhao, 2023. "Spatial–Temporal Evolution and Driving Factors of Economic Dual Circulation Coordinated Development in China’s Coastal Provinces," Sustainability, MDPI, vol. 15(14), pages 1-21, July.
    12. Wen Chen & Lizhi Xing, 2022. "Measuring the Intermediate Goods’ External Dependency on the Global Value Chain: A Case Study of China," Sustainability, MDPI, vol. 14(7), pages 1-21, April.
    13. Halit Yanikkaya & Abdullah Altun, 2018. "Once Again, Trade Openness and Growth: Are Trade in Value Added Concepts Different?," Working Papers 2018-01, Gebze Technical University, Department of Economics.
    14. Johnson, Robert C. & Noguera, Guillermo, 2012. "Accounting for intermediates: Production sharing and trade in value added," Journal of International Economics, Elsevier, vol. 86(2), pages 224-236.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maria Cipollina & Luca Salvatici, 2008. "Measuring Protection: Mission Impossible?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(3), pages 577-616, July.
    2. John Knight & Sai Ding, 2008. "Why has China Grown so Fast? The Role of Structural Change," Economics Series Working Papers 415, University of Oxford, Department of Economics.
    3. Eriṣ, Mehmet N. & Ulaṣan, Bülent, 2013. "Trade openness and economic growth: Bayesian model averaging estimate of cross-country growth regressions," Economic Modelling, Elsevier, vol. 33(C), pages 867-883.
    4. Mr. Andrew Berg & Anne O. Krueger, 2003. "Trade, Growth, and Poverty: A Selective Survey," IMF Working Papers 2003/030, International Monetary Fund.
    5. Eiji Fujii, 2019. "What Does Trade Openness Measure?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 81(4), pages 868-888, August.
    6. María Soledad Feal Zubimendi, 2008. "Crecimiento económico y apertura comercial: análisis de la influencia de los canales," Estudios Economicos, Universidad Nacional del Sur, Departamento de Economia, vol. 25(50), pages 37-73, January-j.
    7. Romain Wacziarg, 2001. "Measuring the Dynamic Gains from Trade," The World Bank Economic Review, World Bank, vol. 15(3), pages 393-39-429.
    8. Stefano Chiarlone & Alessia Amighini, 2000. "Any Sequel to the "Miracle"? Growth Potential in East Asia: Evidence from International Trade Flows," KITeS Working Papers 123, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Dec 2000.
    9. Fayq Al Akayleh, 2017. "Accession to World Trade Organization and its Implications for Trade Diversification and Economic Activity: Evidence from Saudi Arabia," International Journal of Economics and Financial Research, Academic Research Publishing Group, vol. 3(12), pages 332-345, 12-2017.
    10. Deb Kusum Das, 2007. "Trade Liberalization and Industrial Productivity: An Assessment of Developing Country Experiences," Working Papers id:1009, eSocialSciences.
    11. Litwin, Carol, 1998. "Trade and Income Distribution in Developing Countries," Working Papers in Economics 9, University of Gothenburg, Department of Economics.
    12. Spilimbergo, Antonio & Londono, Juan Luis & Szekely, Miguel, 1999. "Income distribution, factor endowments, and trade openness," Journal of Development Economics, Elsevier, vol. 59(1), pages 77-101, June.
    13. Arvind Panagariya, 2003. "Alternative Approaches to Measuring the Cost of Protection," International Trade 0308002, University Library of Munich, Germany.
    14. Rod Falvey & Neil Foster & David Greenaway, 2001. "Institutions and Structural Unemployment: North-South Trade, Openness and Growth," Vienna Economics Papers 0108, University of Vienna, Department of Economics.
    15. B. Bosworth & S. M. Collins & Y. Chen, "undated". "Accounting for Difference in Economic Growth," Discussion Papers 115, Brookings Institution International Economics.
    16. Antonio Spilimbergo & Juan Luis Londoño & Miguel Székely, 1997. "Distribución del ingreso, dotación de factores y apertura comercial," Research Department Publications 4089, Inter-American Development Bank, Research Department.
    17. Iyke Bernard Njindan, 2017. "Does Trade Openness Matter for Economic Growth in the CEE Countries?," Review of Economic Perspectives, Sciendo, vol. 17(1), pages 3-24, March.
    18. James Proudman & Stephen Redding & Marco Bianchi, 1997. "Is International Openness associated with faster economic growth?," Bank of England working papers 63, Bank of England.
    19. Navaratnam Ravinthirakumaran, 2014. "Applicability of Openness-led Growth Hypothesis in Sri Lanka," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 15(2), pages 241-263, September.

    More about this item

    Keywords

    Degree of openness; openness to intra-regional trade; bilateral trade; value-added approach; input-output analysis;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • F15 - International Economics - - Trade - - - Economic Integration
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jns:jbstat:v:226:y:2006:i:2:p:115-138. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.