THE RELATIONSHIP BETWEEN INTERNATIONAL TRADE AND PERSONAL INCOME: CAUSALITY ANALYSIS FOR SELECTED EMERGING MARKET ECONOMIES

Abstract

This study aims to investigate the relationship between “trade openness” which represents international trade, and the employment rate, capital stock and GDP per capita for 9 countries selected among emerging market economies (Turkiye, Russia, China, Singapore, Thailand, South Korea, Argentina, Brazil and South Africa) with annual data for the period 1991-2019. In this study, it was used the panel causality analysis. According to the findings of the study, the variables with bidirectional causality relationship are trade openness and GDP per capita, trade openness and employment rate and capital stock. In conclusion, even though international trade is recognized as a powerful engine for economic growth, policies are needed to ensure that the opportunities it offers are shared equally. This requires efforts to promote free and fair trade, a combination of education and infrastructure investments in support of local development, and ultimately a mutually beneficial relationship between countries and their global counterparts.

Keywords

• international trade
• economic growth
• panel causality analysis.