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' relativeincome 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. [JEL F43, F15]

The rapid economic growth of developing countries that opened their markets to free international trade during the past two decades has stimulated a large empirical and theoretical literature on the impact of trade on growth. This literature concludes that free trade and growth were positively correlated during the 1970s and 1980s. However, most studies focus on nondiscriminatory openness. Does regional integration matter for economic growth? Do regional trade agreements have any impact on growth? This article presents empirical evidence that countries with open, large, and more developed neighboring economies grow faster than those with closed, smaller, and less developed neighboring economies. The results are robust to different specifications of the empirical model and different definitions of openness, suggesting that small economies should grow faster when they form regional trade agreements with large and more developed economies. However, testing for the impact of five regional trade agreements during the 1970s and 1980s finds that none led to faster growth. The main reason seems to be that most of these agreements were among small, closed, and developing economies.

This is a Working Paper and the author(s) would welcome any comments on the present text. Citations should refer to a Working Paper of the International Monetary Fund. The views expressed are those of the author(s) and do not necessarily represent those of the Fund.

BackgroundThe main purpose of the study was to quantify the direct costs of oral cancer treatment to the healthcare system of Greece. Another aim was to identify factors that affect costs and potential cost reduction items. More specifically, we examined the relationship between stage of disease, modality of treatment and total direct costs.MethodsThe medical records and clinic files of the Oral and Maxillofacial Clinic of the Athens General Hospital "Genimatas" were abstracted to investigate clinical treatment characteristics, including length of hospitalization, modes of treatment, stage of disease etc. Records of 95 patients with oral squamous cell carcinoma (OSSC), with at least six months of follow-up, were examined. The clinical data was then used to calculate actual direct costs, based on 2001 market values.ResultsThe mean total direct costs for OSSC treatment estimated at euro 8,450 or approximately US$ 7,450. Costs depended on the stage of the disease, with significant increases in stages III and IV, as compared with stages I and II (p < 0.05). Multi-modality treatment applied mainly to patients in stages III and IV was the factor that affected the cost. Disease stage was also associated with the total duration of hospitalization (p < 0.05).ConclusionsThe clinical management of advanced oral cancer is strongly associated with higher costs. Although the ideal would be to prevent cancer, the combination of high-risk screening, early diagnosis and early treatment seems the most efficient way to reduce costs, and most importantly, prolong life.

We would like to thank Enrique Alberola, Joshua Aizenman, Erik Berglöf, Guillermo Calvo, Jin Han, Andrea Ichino, Jean Imbs, Maurizio Mazzocco, Joe Ostroy, Amine Ouazad and Romain Wacziarg as well as participants at the Economic Policy panel meeting for helpful comments, and the following people for sharing their data sets with us: Reza Baqir (IMF Vulnerability Exercise for Emerging Economies); Herman Kamil (foreign currency borrowing by sector in Latin America); Stephanie Prat (foreign currency foreign assets and liabilities for various emerging economies); and Christoph Rosenberg and Marcel Tirpak (direct borrowing in East Europe from abroad). The views expressed in this paper are those of the authors and do not necessarily represent those of the IMF or IMF policy.The Managing Editor in charge of this paper was Tullio Jappelli