Trade openness and economic growth: empirical evidence from India

By Q. Hye, Wee‐Yeap Lau. 2014

178 citations recorded by the source corpus.

The main objective of this study is to develop first time trade openness index and use this index to examine the link between trade openness and economic growth in case of India. This study employs a new endogenous growth model for theoretical support, auto-regressive distributive lag model and rolling window regression method in order to determine long run and short run association between trade openness and economic growth. Further granger causality test is used to determine the long run and short run causal direction. The results reveal that human capital and physical capital are positively related to economic growth in the long run. On the other hand, trade openness index negatively impacts on economic growth in the long run. The new evidence is provided by the rolling window regression results i.e. the impact of trade openness index on economic growth is not stable throughout the sample. In the short run trade openness index is positively related to economic growth. The result of granger causality test confirms the validity of trade openness-led growth and human capital-led growth hypothesis in the short run and long run.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/2386c225ea9eeaa3536bbd49529baa3a9b03075c

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

Citations in the corpus

Impact of Trade Openness and Human Capital on Economic Growth: A Comparative Investigation of Asian Countries (2020, background): “Hye and Lau [45] revealed that trade openness has a negative relationship with economic growth in the long run and a positive one in short-run.”
The asymmetric effect of trade openness on economic growth in South Africa: a nonlinear ARDL approach (2020, background): “On the other hand, a few empirical studies have found that trade openness impedes economic growth (Lawal et al. 2016; Vlastou 2010; Zahonogo 2017; Adhikary 2010; Goh et al. 2017; Eris and Ulasan 2013; Hye and Lau 2015).”