A Theoretical & Empirical Study about the Degree of Trade Openness in Developing Countries

Abstract

In this article, the degree of openness through econometrics tests and by the use of Dowrick's tests and model will be investigated. The purpose of this paper is to study the degree of openness and its relation with the economic growth in some selected developing countries. For this purpose, a Panel Data Econometrics methodology is employed in which is included with least square dummy variable's (LSDV) and weighted least square's estimates. The results of Panel indicate that the effect of degree of trade openness in economic growth is positive. The initial model from the cross-section results for 74 developing and developed countries also indicate a positive relation between the degree of trade openness and economic growth for the period of 1960-1990. In this regression, the growth of per capita gross national product is regressed on the degree of trade openness, rates of investment and the initial real per capita GNP of the year of 1960.