How Much Do Trading Partners Matter for Economic Growth?

By Vivek B. Arora, Athanasios Vamvakidis. Social Science Research Network, 2004

189 citations recorded by the source corpus.

This paper empirically examines the extent to which a country's economic growth is influenced by the economies of its trading partners. Panel estimation results based on four decades of data for more than 100 countries show that trading partners' growth has a strong effect on domestic growth, even after controlling for the influence of common global and regional trends. The results are robust to instrumental variable estimation and other robustness tests. Trading partners' relative income levels are also positively correlated with growth, suggesting that the richer a country's trading partners, the stronger is conditional convergence. A general implication of the results is that countries benefit from trading with fast-growing and relatively more developed countries.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/ed9f0e27cae9cb45eda8d074955c6a0fb41e6477

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In Economics and Econometrics

1. Giorgio Fagiolo
2. Stefano Schiavo
3. Javier A. Reyes
4. Andrea Roventini
5. Giovanni Dosi

Citations in the corpus

• The evolution of the world trade web: a weighted-network analysis (2010, background): “Empirically, recent studies have in fact suggested that gains from trade do not depend only on the degree of trade openness, but also on the number of trading partners and their characteristics (Arora and Vamvakidis, 2005).”