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Trade Openness and Economic Growth: Empirical Evidence from Transition Economies

In: Trade and Global Market

Author

Listed:
  • Sabina Silajdzic
  • Eldin Mehic

Abstract

The relationship between trade openness and economic growth is ambiguous from both theoretical and empirical point of view. The theoretical propositions reveal that while trade openness leads to a greater economic efficiency, market imperfections, differences in technology and endowments may lead to adverse effect of trade liberalisation on individual countries. In this chapter, we re-examine the empirical evidence pointing to the benefits of trade liberalisation and bring theoretical issues on possible adverse effect of openness to the fore. It has been argued that 'passive' trade liberalisation may not necessarily lead to positive economic outcomes, particularly in less advanced transition economies. Considering the empirical work on the matter, a lot of controversies are related to measurement issues. We find that openness measured by trade intensity indicators may lead to misleading conclusions about the trade growth nexus. Hence, the discussion of policy implications regarding the positive influence of trade barriers on economic growth goes well beyond the context of transition.

Suggested Citation

  • Sabina Silajdzic & Eldin Mehic, 2018. "Trade Openness and Economic Growth: Empirical Evidence from Transition Economies," Chapters, in: Vito Bobek (ed.), Trade and Global Market, IntechOpen.
    • Handle: RePEc:ito:pchaps:141767
    DOI: 10.5772/intechopen.75812
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    File URL: https://www.intechopen.com/chapters/61175
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    Citations

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    Cited by:

    1. Tudorache, Maria-Daniela, 2020. "Human development: a key driver of socioeconomic development in EU," EconStor Conference Papers 222441, ZBW - Leibniz Information Centre for Economics.
    2. FAUZEL Sheereen, 2019. "Energy Consumption and Economic Growth for Small Island Developing States: A Panel ARDL Approach," Energy Economics Letters, Asian Economic and Social Society, vol. 6(1), pages 23-29, March.
    3. Miao Miao & Qiaoqi Lang & Dinkneh Gebre Borojo & Jiang Yushi & Xiaoyun Zhang, 2020. "The Impacts of Chinese FDI and China–Africa Trade on Economic Growth of African Countries: The Role of Institutional Quality," Economies, MDPI, vol. 8(3), pages 1-20, June.
    4. Yilmaz Onur Ari, 2020. "The Relationship Between Renewable Energy Consumption, Trade Openness And Economic Growth: The Case Of Bosnia And Herzegovina," Economic Review: Journal of Economics and Business, University of Tuzla, Faculty of Economics, vol. 18(1), pages 49-59, May.
    5. Achouak Barguellil, 2021. "The Asymmetric Indirect Impact of Real Exchange Rate on Economic Growth through Foreign Trade: An Asymmetric ARDL Panel Model," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 11(8), pages 658-671, August.
    6. Melina Dritsaki & Chaido Dritsaki, 2020. "Trade Openness and Economic Growth: A Panel Data Analysis of Baltic Countries," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(3), pages 313-324, March.
    7. Emmanuel Olajide Adebayo, 2019. "Trade Trend and Sustainable Development in Nigeria," Business & Management Compass, University of Economics Varna, issue 4, pages 294-308.
    8. Nanyue Wang & Pourya Seyedmatin, 2020. "Modeling the Causal Linkages between Trade Openness, Innovation, Financial Development and Economic Growth in Asian Countries," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 10(8), pages 194-203, August.

    More about this item

    Keywords

    trade openness; economic growth; trade liberalisation; transition economies;
    All these keywords.

    JEL classification:

    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid

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