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International Integration and Growth: A Further Investigation on Developing Countries

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  • Claire Economidou
  • Vivian Lei
  • Janet Netz

Abstract

The paper examines empirically the linkages between international integration and economic growth in a panel of 47 developing countries and 18 trade blocs over the period 1970–1989. Specifically, it attempts to identify through which channel(s) – notably, specialization according to comparative advantage and increased efficiency, exploitation of increasing returns from larger market, and technology spillovers through investment and trade–trade blocs can affect the economic growth of their member countries. The results suggest that (1) intra-bloc trade does not affect growth significantly; (2) income diversion among member countries contributes positively and significantly to growth; and (3) the size of the trade bloc does matter in the sense that the bigger is not always the better for the welfare of the member countries. Copyright International Atlantic Economic Society 2006

Suggested Citation

  • Claire Economidou & Vivian Lei & Janet Netz, 2006. "International Integration and Growth: A Further Investigation on Developing Countries," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 12(4), pages 435-448, November.
    • Handle: RePEc:kap:iaecre:v:12:y:2006:i:4:p:435-448:10.1007/s11294-006-9038-y
    DOI: 10.1007/s11294-006-9038-y
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    More about this item

    Keywords

    F15; O47; international integration; economic growth; trade blocs; developing countries;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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