Openness, Productivity and Growth

What Do We Really Know

Dados Bibliográficos

ID9719324
AutoresShane Edwards (0000-0002-3249-9702, National Bureau of Economic Research, autor correspondente), Sebastián Edwards (University of California, Los Angeles and National Bureau of Economic Research)
Ano1998
Volume108
Fascículo447
Páginas383-398
Data de publicação1998-03-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoThe Economic Journal (JOURNAL)
Identificadores do periódicoISSN: 0013-0133 • E-ISSN: 1468-0297
EditoraOxford University Press (OUP) (PUBLISHER)
DOI10.1111/1468-0297.00293
OpenAlexW2063914592
IdiomaEN
Citações recebidas153

For over a century social analysts have debated the connection between trade policy and economic performance. This controversy continues today, even as the world is experiencing an unprecedented period of trade liberalization, and in spite of numerous empirical studies that claim to have found a positive effect of openness on growth. Two issues have been at the core of these controversies: first, until recently theoretical models had been unable to link trade policy to faster equilibrium growth. And second, the empirical literature on the subject has been affected by serious data problems. In this paper I use a new comparative data set for 93 countries to analyze the robustness of the relationship between openness and TFP growth. I use nine alternative indexes of trade policy to investigate whether the evidence supports the view that, with other things given, TFP growth is faster in more open economies. The regressions reported here are robust to the use of openness indicator, estimation technique, time period and functional form, and suggest that more open countries have indeed experienced faster productivity growth. Although the use of instrumental variables goes a long way towards dealing with endogeneity, issues related to causality are still somewhat open, and will require time series analyses to be adequately addressed

Econometrics · Economics · Endogeneity · Free trade · International economics · International trade · Macroeconomics · Openness to experience · Productivity · Robustness (evolution · Total factor productivity · Economic Growth and Productivity · Global trade and economics · International Development and Aid