Trade liberalization and economic growth: a panel data analysis for transition economies in Europe

Abstract

Purpose-In this study, the long-term and the short-term relationships between economic growth and trade liberalization for 13 transition countries in Europe were examined. Methodology-The dataset includes 303 observations from 1995 to 2016 for the variables of gross domestic product (GDP), export (EXP), import (IMP), gross fixed capital formation (GFCF), foreign direct investment (FDI) and human capital (HC). PLS Test, Pesaran ( 2004) CD-Test, Pesaran (2007) Unit Root Test, Swamy S Homogeneity Test conducted before causality and cointegration analysis. Dumitrescu & Hurlin (2012) Granger Panel Causality Test for short-term causality, and Westerlund ECM Panel Cointegration and PDOLS Estimator for long-term relationships analyses were employed. Findings-The short-term outcomes revealed that there is a bidirectional causality between (a) EXP and GDP, (b) GFCF and GDP, (c) FDI and GDP, (d) HC and GDP, and a unidirectional causality (e) from IMP to GDP. The long-term results show that (i) a 1% raise in EXP boosts GDP by 0.39%, (ii) a 1% raise in IMP boosts GDP by 0.11% (iii) a 1% raise in GFCF boosts GDP by 0.37% (iv) a 1% raise in FDI reduces GDP by 1.35%, (v) a 1% raise in HC boosts GDP by 0.54% in the long-term. Conclusion-Both in the short-term and the long-term trade liberalization has a positive impact on economic growth in mutual way between EXP, IMP and GDP as it is argued by the feed-back hypothesis.

Determinants of Foreign Direct Investment: A Panel Data Analysis for Sub-Saharan African Countries

“…In addition, unlike other studies, they concluded that political rights and infrastructure are not important indicators of FDI inflows to Africa. In the study conducted by Erkisi and Ceyhan (2019) to investigate the relationship between trade liberalization and economic growth in transition economies, it was concluded that economic growth has an impact on FDI in the short-run, however it reduces the FDI in the long-run. In the research carried out by Erkişi (2018) to explore the causal relationship between FDI, trade openness and economic growth in Turkey, economic growth, export, and import were not found to be the granger cause of FDI.…”

Pertumbuhan Ekonomi dan Kemiskinan Indonesia: Analisis Dampak Liberalisasi Perdagangan pada Mitra Dagang Utama

“…Liberalisasi perdagangan adalah penghapusan atau pengurangan pembatasan atau hambatan pada pertukaran barang bebas antar negara, dan memiliki sisi yang menarik karena beberapa penulis menganggap bahwa liberalisasi perdagangan memiliki dampak negatif pada pertumbuhan ekonomi dan kemiskinan, seperti menyebabkan perlambatan pertumbuhan (Greenaway, Leybourne, & Sapsford, 1997), kurang efektif dalam mendorong pertumbuhan (Yanikkaya, 2003), menyebabkan ketimpangan dan kemiskinan di negara-negara berkembang (Gavin, M., & Hausmann, 1998;Laursen, Thomas and Mahajan, 2005;Islam & Fatema, 2017 ). Beberapa penulis juga mempertimbangkan dampak keterbukaan ekonomi yang diikuti oleh liberalisasi perdagangan yang tidak didukung oleh bukti yang cukup jika dikaitkan dengan pertumbuhan suatu negara (Rodriguez & Rodrik, 2000;Shafaeddin, 2010;Wacziarg, R., & Welch, 2003;Erkisi & Ceyhan, 2019;Alamro, 2017). Disisi lain, beberapa penulis berasumsi bahwa pertumbuhan ekspor tidak dipengaruhi oleh liberalisasi perdagangan (Agosín, 1991;Clarke, R., & Kirkpatrick, 1992;Jenkins, 1996).…”

“…Pada saat itu, ekonomi runtuh dan beberapa krisis utang di negara-negara berkembang secara signifikan melemah terhadap pengaruh proteksionis. Beberapa literatur empiris menunjukkan hubungan sebab-akibat yang kuat antara perdagangan dan pertumbuhan, serta dampak terhadap kemiskinan (Erkisi & Ceyhan, 2019;Alamro, 245 2017;Islam & Fatema, 2017;Fauzel, 2020;Koffi et al, 2018;Mahembe & Odhiambo, 2019;Sofjan,2018). Untuk alasan itu, banyak negara membuat kebijakan konseptual untuk melakukan era liberalisasi.…”

“…Untuk alasan itu, banyak negara membuat kebijakan konseptual untuk melakukan era liberalisasi. Greenaway et al, (1997) menyelidiki dampak liberalisasi perdagangan terhadap pertumbuhan ekonomi dari 74 negara berkembang terpilih di dunia (Greenaway et al, 1997, Erkisi & Ceyhan, 2019Alamro, 2017). Variabel dummy digunakan untuk menyelidiki dampak liberalisasi perdagangan, dan ia menemukan tanggapan beragam.…”

The Effect of Trade, Foreign Direct Investment, Expenditure, and Inflation on Economic Growth: Evidence from Members of The G20

“…Adam Smith was the first to hold the belief that trade liberalization had an impact on economic growth. The fundamental views of economists like Hume, Smith, and Ricardo, who supported the School of Mercantilism and Classical Economics, served as the beginning point for the lengthy argument that has continued to this day on this idea (Ceyhan & Erkisi, 2019).…”