IDEAS home Printed from https://ideas.repec.org/p/boe/boeewp/63.html
   My bibliography  Save this paper

Is International Openness associated with faster economic growth?

Author

Listed:
  • James Proudman
  • Stephen Redding
  • Marco Bianchi

Abstract

This paper considers the role of international openness in facilitating the convergence of average income per capita between countries. The statistical technique of Discriminant Analysis is used to sort economies into groups of open and closed on the basis of a number of measures of the stance of international trade policy. The evolution of the cross-section distribution of average income per capita across countries is modelled both for the whole world, and then for the groups of open and closed economies separately. Open economies are found to exhibit substantially different income dynamics and to converge to higher levels of income compared to their closed counterparts. These differences remain even after making allowance for differences in countries' relative levels of investment.

Suggested Citation

  • James Proudman & Stephen Redding & Marco Bianchi, 1997. "Is International Openness associated with faster economic growth?," Bank of England working papers 63, Bank of England.
    • Handle: RePEc:boe:boeewp:63
    as

    Download full text from publisher

    File URL: http://www.bankofengland.co.uk/archive/Documents/historicpubs/workingpapers/1997/wp63.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Paapaa, Richard & van Dijk, Herman K., 1998. "Distribution and mobility of wealth of nations," European Economic Review, Elsevier, vol. 42(7), pages 1269-1293, July.
    2. repec:bla:ecorec:v:78:y:2002:i:243:p:375-80 is not listed on IDEAS
    3. Baumol, William J & Wolff, Edward N, 1988. "Productivity Growth, Convergence, and Welfare: Reply," American Economic Review, American Economic Association, vol. 78(5), pages 1155-1159, December.
    4. Sala-i-Martin, Xavier X., 1996. "Regional cohesion: Evidence and theories of regional growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1325-1352, June.
    5. J Andres & A Lamo, 1995. "Dynamics of the Income Distribution across OECD Countries," CEP Discussion Papers dp0252, Centre for Economic Performance, LSE.
    6. Quah, Danny T, 1996. "Aggregate and Regional Disaggregate Fluctuations," Empirical Economics, Springer, vol. 21(1), pages 137-159.
    7. Quah, Danny T, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," Economic Journal, Royal Economic Society, vol. 106(437), pages 1045-1055, July.
    8. Quah, D., 1990. "Galton'S Fallacy And The Tests Of The Convergence Hypothesis," Working papers 552, Massachusetts Institute of Technology (MIT), Department of Economics.
    9. Quah, Danny, 1993. "Empirical cross-section dynamics in economic growth," European Economic Review, Elsevier, vol. 37(2-3), pages 426-434, April.
    10. Megir, Costas & Quah, Danny, 1995. "Regional convergence clusters across Europe," LSE Research Online Documents on Economics 2188, London School of Economics and Political Science, LSE Library.
    11. 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.
    12. 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.
    13. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    14. Edwards, Sebastian, 1992. "Trade orientation, distortions and growth in developing countries," Journal of Development Economics, Elsevier, vol. 39(1), pages 31-57, July.
    15. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    16. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    17. Quah, Danny, 1996. "Regional Convergence Clusters Across Europe," CEPR Discussion Papers 1286, C.E.P.R. Discussion Papers.
    18. Jung, Woo S. & Marshall, Peyton J., 1985. "Exports, growth and causality in developing countries," Journal of Development Economics, Elsevier, vol. 18(1), pages 1-12.
    19. Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-1085, December.
    20. Penalosa, C.G., 1995. "Absolute Poverty or Relative Inequality : A theory of Growth and Wage Differentials," Economics Papers 97, Economics Group, Nuffield College, University of Oxford.
    21. Gavin Cameron & James Proudman & Stephen Redding, 1997. "Deconstructing Growth in UK Manufacturing," Bank of England working papers 73, Bank of England.
    22. Quah, Danny T., 1996. "Empirics for economic growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1353-1375, June.
    23. Desdoigts, A., 1995. "Changes in the World Income Distribution: a Non-Parametric Approach to Challenge the Neo-Classical Convergence Argument," SFB 373 Discussion Papers 1995,15, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    24. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    25. Friedman, Milton, 1992. "Do Old Fallacies Ever Die?," Journal of Economic Literature, American Economic Association, vol. 30(4), pages 2129-2132, December.
    26. Pritchett, Lant, 1996. "Measuring outward orientation in LDCs: Can it be done?," Journal of Development Economics, Elsevier, vol. 49(2), pages 307-335, May.
    27. Feder, Gershon, 1983. "On exports and economic growth," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 59-73.
    28. Bliss, C., 1995. "Capital Mobility, Convergence Clubs and Long-Run Economic Growth," Economics Papers 100, Economics Group, Nuffield College, University of Oxford.
    29. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
    30. Robert E. Baldwin, 1988. "Trade Policy Issues and Empirical Analysis," NBER Books, National Bureau of Economic Research, Inc, number bald88-2.
    31. Danny Quah, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," CEP Discussion Papers dp0280, Centre for Economic Performance, LSE.
    32. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
    33. Robert Summers & Alan Heston, 1988. "A New Set Of International Comparisons Of Real Product And Price Levels Estimates For 130 Countries, 1950–1985," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 34(1), pages 1-25, March.
    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. Epstein, Philip & Howlett, Peter & Schulze, Max-Stephan, 2000. "Distribution dynamics: stratification, polarisation and convergence among OECD economies, 1870-1992," Economic History Working Papers 22380, London School of Economics and Political Science, Department of Economic History.
    2. Epstein, Philip & Howlett, Peter & Schulze, Max-Stephan, 2007. "Trade, convergence, and globalisation: The dynamics of the international income distribution, 1950-1998," Explorations in Economic History, Elsevier, vol. 44(1), pages 100-113, January.
    3. Arribas, Iván & Bensassi, Sami & Tortosa-Ausina, Emili, 2020. "Trade integration in the European Union: Openness, interconnectedness, and distance," The North American Journal of Economics and Finance, Elsevier, vol. 52(C).
    4. Dinopoulos, Elias & Thompson, Peter, 2000. "Endogenous growth in a cross-section of countries," Journal of International Economics, Elsevier, vol. 51(2), pages 335-362, August.
    5. Iván Arribas & Francisco Pérez & Emili Tortosa-Ausina, 2014. "The dynamics of international trade integration: 1967–2004," Empirical Economics, Springer, vol. 46(1), pages 19-41, February.
    6. Beyaert, Arielle & García-Solanes, José, 2014. "Output gap and non-linear economic convergence," Journal of Policy Modeling, Elsevier, vol. 36(1), pages 121-135.
    7. Rimvie Enoc Kabore, 2021. "Complementarity between human capital and public infrastructure in industrial comparative advantage," Working Papers hal-03359662, HAL.
    8. Gavin Cameron & James Proudman & Stephen Redding, 1999. "Openness and its association with productivity growth in UK manufacturing industry," Bank of England working papers 104, Bank of England.
    9. Wajdi Bardi & Mohamed Ali Hfaiedh, 2021. "International trade and economic growth: evidence from a panel ARDL-PMG approach," International Economics and Economic Policy, Springer, vol. 18(4), pages 847-868, October.

    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. Cem Ertur & Julie Le Gallo & Catherine Baumont, 2006. "The European Regional Convergence Process, 1980-1995: Do Spatial Regimes and Spatial Dependence Matter?," International Regional Science Review, , vol. 29(1), pages 3-34, January.
    2. Leone Leonida & Leone Leonida & Daniel Montolio, 2003. "Public Capital, Growth and Convergence in Spain. A Counterfactual Density Estimation Approach," Working Papers 2003/3, Institut d'Economia de Barcelona (IEB).
    3. Ana Lamo, 2000. "On convergence empirics: same evidence for Spanish regions," Investigaciones Economicas, Fundación SEPI, vol. 24(3), pages 681-707, September.
    4. Durlauf, Steven N. & Quah, Danny T., 1999. "The new empirics of economic growth," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 4, pages 235-308, Elsevier.
    5. Roberto Ezcurra & Carlos Gil & Pedro Pascual & Manuel Rapun, 2005. "Inequality, Polarisation and Regional Mobility in the European Union," Urban Studies, Urban Studies Journal Limited, vol. 42(7), pages 1057-1076, June.
    6. Julie Le Gallo, 2004. "Space-Time Analysis of GDP Disparities among European Regions: A Markov Chains Approach," International Regional Science Review, , vol. 27(2), pages 138-163, April.
    7. Ben-David, Dan, 1996. "Trade and convergence among countries," Journal of International Economics, Elsevier, vol. 40(3-4), pages 279-298, May.
    8. Ezcurra, Roberto, 2007. "Is there cross-country convergence in carbon dioxide emissions?," Energy Policy, Elsevier, vol. 35(2), pages 1363-1372, February.
    9. Enrique Lopez Bazo & Esther Vaya Valcarce & Antonio Jose Mora & Jordi Surinach Caralt, 1997. "Regional economic dynamics and convergence in the european union," Working Papers in Economics 12, Universitat de Barcelona. Espai de Recerca en Economia.
    10. repec:cpn:umkeip:2012:v4:p:167-186 is not listed on IDEAS
    11. Leone Leonida & Daniel Montolio, 2001. "Convergence and Inter-Distributional Dynamics among the Spanish Provinces. A Non-parametric Density Estimation Approach," Working Papers 2001/7, Institut d'Economia de Barcelona (IEB).
    12. George Hammond & Eric Thompson, 2002. "Mobility and Modality Trends in US State Personal Income," Regional Studies, Taylor & Francis Journals, vol. 36(4), pages 375-387.
    13. Magrini, Stefano, 2004. "Regional (di)convergence," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 62, pages 2741-2796, Elsevier.
    14. Alejandro Diaz Bautista & Mauro Diaz Dominguez, 2004. "Capital Humano y Crecimiento Económico en México (1970-2000). Human Capital and Economic Growth in Mexico," Urban/Regional 0405008, University Library of Munich, Germany.
    15. Leone Leonida & Leone Leonida & Daniel Montolio, 2003. "Public Capital, Growth and Convergence in Spain. A Counterfactual Density Estimation Approach," Working Papers 2003/3, Institut d'Economia de Barcelona (IEB).
    16. Michal Bernard Pietrzak, 2012. "The use of a spatial switching regression model in the analysis of regional convergence in Poland," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 11(4), pages 167-186, December.
    17. FE, Doukouré Charles, 2010. "Réduction de Droits de Douane et Convergence Réelle dans l'UEMOA [Tariffs Reduction and Real Convergence in WAEMU]," MPRA Paper 26763, University Library of Munich, Germany.
    18. Paul Johnson & Chris Papageorgiou, 2020. "What Remains of Cross-Country Convergence?," Journal of Economic Literature, American Economic Association, vol. 58(1), pages 129-175, March.
    19. Azomahou, Théophile T. & El ouardighi, Jalal & Nguyen-Van, Phu & Pham, Thi Kim Cuong, 2011. "Testing convergence of European regions: A semiparametric approach," Economic Modelling, Elsevier, vol. 28(3), pages 1202-1210, May.
    20. Haupt, Harry & Schnurbus, Joachim & Semmler, Willi, 2018. "Estimation of grouped, time-varying convergence in economic growth," Econometrics and Statistics, Elsevier, vol. 8(C), pages 141-158.
    21. Torres Solé, T. & Sala-Ríos, M., 2008. "La convergencia socio-económica de las Comunidades Autónomas españolas en la década de los noventa," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 26, pages 303-332, Julio.

    More about this item

    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:boe:boeewp:63. 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: Digital Media Team (email available below). General contact details of provider: https://edirc.repec.org/data/boegvuk.html .

    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.