Trade liberalization and economic growth in Guyana (original) (raw)
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Trade liberalization and growth in developing countries: Some new evidence
World Development, 1997
The 1980's and 1990's have seen a remarkable wave of unilateral liberalization. In some cases the pressures for reform have been internal and programs have been designed and implemented without the involvement of any external agency. Where developing countries are concerned, in most cases, the key multilateral lending agencies have had a key role to play in securing commitment to reform, its design and implementation. Experience with trade reforms has been mixed with evidence of growth enhancement in some programs but of stagnation in many others. The focus of this paper is the effect of liberalization on growth of GDP. More specifically we concentrate on a group of countries which have liberalized in the post-1985 period. The sample is broadly based in its geographical coverage and in the stage of development of the countries concerned. Our sample also includes some 44 nonliberalizers over the period in question. Using panel data estimation techniques, we are interested in whether these recent liberalizations have been associated with faster or slower growth. 0 1997 Elsevier Science Ltd. All rights reserved.
Advances in Management and Applied Economics, 2021
Using quarterly data between 1981q1 and 2018q4, the paper investigates the relationship between trade liberalization and economic growth in Nigeria. Exploring Johnasen cointegration technique and the Vector Error Correction (VEC) method, the paper considers three alternative measures of trade liberalization to determine whether the response of economic growth to trade liberalization is sensitive to the choice of the indicators of trade liberalization under consideration. The paper finds significant effects of trade liberalization on the economy. The paper recommends that government should implement policies that will promote trade openness in Nigeria. This may be achieved by establishing bilateral and multi-lateral agreements that are favourable and that will support appropriate technology transfer to domestic producers. JEL classification numbers: F31, F13, F41. Keywords: Trade liberalization, Tariffs, Economic growth, Nigeria.
SSRN Electronic Journal, 2000
This is a study of 42 developing countries of Asia, Africa and Latin America in which we first examine the impact of trade liberalisation on economic growth, investment share of GDP, openness, trade balance and current accounts (as percentages of GDP). Both panel data and country by country data are used to measure the impact of liberalisation on domestic economic growth measured in PPP terms from the data available in Heston, Summers and Aten (2001) study. Domestic economic growth is often positively related to liberalisation for many countries of our sample. Next we analyse the impact of growth on trade balance and current account to examine whether higher economic growth due to liberalisation leads to adverse effect on balance of trade. Trade balance is normalised by GDP to take into consideration different sizes of countries. We also allow control variables in both sets of regressions such as terms of trade, advanced countries' growth rates, liberalisation and debt related variables. The balance of payments constrained growth model uses foreign exchange constraint that limits growth and using the Harrod multiplier, Thirlwall and Hussain derived a growth equation which is apparently constrained by balance of payments. We use this model in the first part as a behavioural equation and establish that liberalisation promotes growth and such output growth in pre-liberalisation period is lower than that in post-liberalisation period. Panel data of 42 countries, regional panel for three regions (fixed effect and random effect models) and country by country analysis (OLS regression) is conducted. These relationships suggest that liberalisation promotes growth but growth itself has negative effect on trade balance for a large majority of countries. This study uses the latest available data on real GDP, growth rates of individual and advanced countries and examines the relationship between liberalisation and growth, liberalisation and trade balance and also the impact of exchange rate or terms of trade policies on trade balance. One of the models in a cross-section regression study makes use of political and security variables and concludes that the convergence or "catchingup" hypothesis is supported and extreme political repression tends to constrain growth. One unit change in liberalisation index leads on average to1.62 percentage point change in growth rates on average, ceteris paribus.
The Impact of Trade Liberalization on Economic Growth in Tanzania
International Journal of Academic Research in Business and Social Sciences, 2014
The broad objective of this study is to analyze the effect of trade liberalization on economic growth in Tanzania. The impact of trade liberalization on economic growth has raised a great attention to many researchers in the international trade arena. Various studies have been conducted however the literature still has the mixed bag of results. Thus, the researchers were motivated to pursue this study so as to fill the gap in the International Trade in Tanzania. The study adopted a simple linear regression model where real GDP was the dependent variable while trade openness was the independent variable. Annual time series data was used covering the period 1970-2010. This overall period was then subdivided into a closed economy period (1970-1985) and a open economy period (1986-2010). OLS technique was used to estimate the regression model twice, regarding the two sub-periods.
DOES TRADE LIBERALIZATION LEADS TO HIGH ECONOMIC GROWTH? (A CASE STUDY OF PAKISTAN)
The current world is beyond doubt emerging as a global home, with the increasing economic, political, social and technical interdependence among countries and regions. This scenario is providing opportunities for the countries to gain benefits from economic integration through adopting a rational liberalize trade regime. In that regard the current thesis is an attempt to test empirically the trade liberalization and economic growth nexus. A recently developed Auto regressive distributed lag (ARDL) model approach is applied to the time series data for the period 1973 to 2013 to analyze the long run relationship between trade openness and economic growth. Augmented Dickey Fuller test and Phillips perron procedures have been utilized provides the results as per the requirement of ARDL approach. The coefficient of Error Correction Term of 0.719 is consistent with the previous literature to a maximum degree. The Bound testing procedure suggests the existence cointegration between dependent variable and set of independent variables.
Impact of Trade Liberalization on the Economy: Cross-country Analysis of Selected Asian Economies
Innovative Systems Design and Engineering, 2014
There exists a controversy on the direction of the causality and relationship among trade liberalization and economic growth. This controversy motivates us to reinvestigate the determinants of the economic growth in the framework of multivariate model. The present study is an attempt to see the impact of trade liberalization on the economic growth of the selected countries of SAARC and ASEAN over the period of 1990 to 2009. To capture the growth effects of trade liberalization an index is calculated on the bases of principal component analysis. With the help of this index, we test the hypothesis that whether the trade liberalization along with other variables is an important determinant of the economic growth. For this purpose we use the fixed and random effect models. We come up with the conclusion that the trade liberalization may improve the economic growth of the developing countries depending on their policy response to the relative factors. Additionally we also find elasticities of capital and labor exhibiting constant return to scale production function in the presence of meager trade parameters.
Trade Liberalization and Economic Growth: A Cross-Country Study using Updated Sachs-Warner Index
Asian Journal of Economic Modelling
The relationship between trade liberalization and economic growth is a hotly contested issue. Some studies claim a positive impact while others oppose it. This study uses updated data to generate new evidence for the debate. Using a dynamic panel framework and the Sachs-Warner indicator of liberalization, this study finds that trade liberalization does appear to impact growth. The evidence this study generated points to the advocacy for trade liberalization and extending trade volume supporting the view of classical economists. This study revisits the linkage between trade openness and growth through an updated empirical analysis. This paper presents an updated dataset of openness indicators and trade liberalization dates for countries from 1990 to 2010. It finds new evidence on the time paths of economic growth, physical capital investment, and openness around episodes of trade policy liberalization. Using the updated Sachs-Warner index, the study shows that trade liberalization po...
The objectives of this paper are to study the impact of liberalisation on trade deficits and current accounts of developing countries. It is expected that trade liberalisation would promote economic growth from the supply side by leading to a more efficient use of resources, by encouraging competition, and by increasing the flow of ideas and knowledge across national boundaries. Trade liberalisation could lead to faster import growth than export growth and hence the supply side benefits may be offset by the unsustainable balance of payments position. This study uses panel data of 42 countries (both time-series and cross-section dimension) to estimate the effect of trade liberalisation and growth on trade balance while controlling for other factors such as income terms of trade. The major finding of the study is that trade liberalisation promotes growth in most cases, (Part 1 of this study) the growth itself has a negative impact on trade balance and this in turn could have negative impacts on growth through deterioration in trade balance and adverse terms of trade. Our conclusion is that trade liberalisation could constrain growth through adverse impact on balance of payments.