Trade-Growth Nexus in Developing and Developed Countries: An Application of Extreme Bounds Analysis
Vol. 4 No. 7 (2014), Articles
Vol. 4 No. 7 (2014)

Trade-Growth Nexus in Developing and Developed Countries: An Application of Extreme Bounds Analysis

Mansour Zarra-Nezhad
Professor of Economics, Shahid Chamran University, Ahvaz, Iran
Fatimah Hosseinpour
Department of Economics, Faculty of Economics and Social Sciences, Shahid Chamran University, Ahvaz, Iran
Seyed Aziz Arman
Department of Economics, Faculty of Economics and Social Sciences, Shahid Chamran University, Ahvaz, Iran
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Keywords

Foreign trade, Economic growth, Robust, Extreme bounds analysis, Developing countries, Developed countries.

How to Cite

Zarra-Nezhad, M. ., Hosseinpour, F. ., & Arman, S. A. . (2014). Trade-Growth Nexus in Developing and Developed Countries: An Application of Extreme Bounds Analysis. Asian Economic and Financial Review, 4(7), 915–929. Retrieved from https://archive.aessweb.com/index.php/5002/article/view/1224
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Abstract

In this study, we investigated the relationship between foreign trade and economic growth in the developing and developed countries by using extreme bounds analysis approach. For this we used unbalanced panel data of 103 variables of 94 countries (74 developing countries and 20 developed countries) during 1990-2010. The estimation results of more than 1.6 million regressions show that more foreign trade indices are robust determinants of economic growth and have robustly positive effect on the economic growth of each country regardless of level of development. In the other words, results of this study support views of free trade advocates.

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