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Review of Economic Perspectives

Národohospodárský obzor; The Journal of Masaryk University

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Volume 17, Issue 1 (Mar 2017)

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Does Trade Openness Matter for Economic Growth in the CEE Countries?

Bernard Njindan Iyke
  • Department of Finance, Deakin Business School, Deakin University, Melbourne Burwood Campus, Australia
  • Email:
Published Online: 2017-04-01 | DOI: https://doi.org/10.1515/revecp-2017-0001

Abstract

This paper sets out to answer the question: Is trade openness important for economic growth in the Central and Eastern European (CEE) countries? The policyoriented measures of trade openness used in earlier studies have been argued to be subjective, while the simple outcome-oriented measures only capture one aspect of trade openness, namely: countries’ share of trade. Hence, following Squalli and Wilson (2011), the paper constructs a new outcome-oriented measure of trade openness which captures a country’s share of trade, and its interaction and interconnectedness with the rest of the world. Using fixed-effects regressions for 17 CEE countries over the period 1994 - 2014, the paper finds trade openness to be important for growth within the CEE countries. In particular, the results show that increases in trade openness is associated with increases in real GDP per capita growth within these countries. The results appear significantly the same after we dropped Croatia and Estonia - two historically closed economies.

Keywords: CEE Countries; Economic Growth; Panel Data; Trade Openness

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About the article

Received: 2016-08-29

Accepted: 2016-12-02

Published Online: 2017-04-01

Published in Print: 2017-03-01


Citation Information: Review of Economic Perspectives, ISSN (Online) 1804-1663, DOI: https://doi.org/10.1515/revecp-2017-0001.

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© by Bernard Njindan Iyke. This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License. BY-NC-ND 4.0

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