发帖
雷达卡
ABSTRACT
Estimatesof growth equations have found a role for openness, particularly in explainingrapid growth among East Asian countries.
But major concerns of simultaneous causality between growth and tradehave been expressed. This study aims todeal with the endogeneity of trade by using as instrumental variables theexogenous determinants from the gravity model of bilateral trade, such asproximity to trading partners. We findthat the effect of openness on growth is even stronger when we correct for theendogeneity of openness than in standard OLS estimates. We conclude with estimates of how much hasbeen contributed to East Asian growth both by the exogenous or geographicalcomponent of openness and by the residual or policy component.
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