Do Natural Barriers Affect the Relationship Between Trade Openness and Growth?
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Colleges, School and Institutes
This article investigates whether there are threshold effects in the relationship between openness and productivity growth that are fashioned by a country's natural barriers, using a cross-country growth model. Alternative methods of modelling thresholds are explored. An endogenous threshold model is shown to be preferable to the use of interaction effects. The results identify critical levels of natural barriers which affect how greater openness or liberalization impacts on productivity growth. We find that only countries with higher natural barriers receive growth benefits from trade liberalization.
|Number of pages||19|
|Journal||Oxford Bulletin of Economics and Statistics|
|Publication status||Published - 1 Feb 2012|
- O49, F13