Does trade openness benefit economic growth?

Abstract

This thesis concentrates on the 1960-1999 period for 117 countries, and uses three different measures of trade openness to examine whether trade openness and economic growth are positively associated, and whether the relationship between openness and growth is dependent on a set of country and external characteristics. Empirical analyses on the basis of panel data show during the 1975-99 period openness and growth are significantly and positively related, but there are conflicting stories about the association between openness and growth during a longer 1960-99 period. The link from trade openness to economic growth seems to be contingent on some country and external characteristics: world trade growth clearly strengthens the openness-growth nexus; initial income, country size, or world trade volume has some effects on the association between openness and growth, which vary depending on the measure of trade openness used; and the structure of merchandise exports does not appear to have much influence on the openness-growth link.