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Trade Structure and Economic Growth in Emerging and Developing Asia: A Dynamic Panel Analysis

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  • Kaveri Deb

    (Indian Institute of Information Technology Guwahati)

Abstract

A country’s structure of trade and its impact on the economic growth of nations, has added a new dimension to the literature on trade and growth. That a country’s specialization in different products is important in determining the pattern of growth, is being increasing realized and explored in related emerging literature. The current paper associates itself with this idea, and by means of One Step System Generalized Method of Moments estimator applied to dynamic panel models, tries to determine how the structure of trade has influenced the growth rate in the fastest growing region of the world—the emerging and developing Asia. The paper uses alternative measures of trade structure constructed after classifying the merchandise trade data into several categories on the basis of resource, skill and technological requirements. The approach adopted in this paper is thus quite exhaustive, and analyses the problem for the selected region in a manner not attempted in any of the existing studies. Our analysis suggests contradictory results, with measures based on trade specialization highlighting the growth enhancing effect of high skill and technology intensive manufactures, while measures based on trade shares in GDP revealing the growth retarding effects of primary products. Hence, the study reveals that the effect of trade structure on economic growth is dependent upon its adopted definition.

Suggested Citation

  • Kaveri Deb, 2022. "Trade Structure and Economic Growth in Emerging and Developing Asia: A Dynamic Panel Analysis," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 20(3), pages 601-628, September.
    • Handle: RePEc:spr:jqecon:v:20:y:2022:i:3:d:10.1007_s40953-022-00298-8
    DOI: 10.1007/s40953-022-00298-8
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    More about this item

    Keywords

    Trade structure; Economic growth; Skill; Dynamic panel model;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation

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