nach oben

Erschienen in:

2022 | OriginalPaper | Buchkapitel

Do Institutional Quality and Trade Openness Influence Economic Growth? An Empirical Evidence from India

verfasst von : Arun Kumar Giri, Geetilaxmi Mohapatra

Erschienen in: Studies in International Economics and Finance

Verlag: Springer Singapore

Einloggen

Aktivieren Sie unsere intelligente Suche, um passende Fachinhalte oder Patente zu finden.

search-config

KI-gestützte Suche

Aus

Abstract

The study empirically examines the impact of trade openness and institutional quality on economic growth in India for the period 1990–2019. The study uses export plus imports as a ratio of GDP and composite governance indicators to measure trade openness and institutional quality, respectively. GDP per capita is used as the proxy for economic growth along with financial development, domestic capital, exchange rate, and inflation as other conventional determinants of economic growth. Autoregressive distributed lag (ARDL) co-integration approach along with the first-generation unit root tests is used in the present study to test empirical relationships. The results reveal that both trade openness and institutional quality exert a significant and positive impact on economic growth in both the long and short runs. Further, the interaction of trade openness and institutional quality is shown to have a significant impact on economic growth as well. The estimates also confirm that domestic capital and financial development have a significant positive influence on the economic growth of the country. The results further indicate that the exchange rate has a significant negative impact on economic growth in both long run and short run.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Vorheriges Kapitel Do Absorptive Capacities Matter for FPI-Growth Nexus? Evidence from Cross-Country Analysis

Nächstes Kapitel Corruption and Economic Growth: Empirical Evidence from BRICS Nations

Acemoglu, D., & Robinson, J. (2010). The role of institutions in growth and development. Review of Economics and Institutions, 1(2), 1–33.CrossRef

Acemoglu, D., Johnson, S., & Robinson, J. A. (2001). The colonial origins of comparative development: An empirical investigation. American Economic Review, 91(5), 1369–1401.CrossRef

Acemoglu, D., Johnson, S., & Robinson, J. A. (2005). Institutions as a fundamental cause of long-run growth. Handbook of Economic Growth, 1(Part A), 385–472.

Acemoglu, D., & Robinson, J. A. (2012). Why nations fail: The origins of power, prosperity, and poverty (pp. 1–571). Crown Publishers.

Adams, S., & Atsu, F. (2014). Aid dependence and economic growth in Ghana. Economic Analysis and Policy, 44(2), 233–242.CrossRef

Adhikary, B. K. (2011). FDI, trade openness, capital formation, and economic growth in Bangladesh: A linkage analysis. International Journal of Business and Management, 6(1), 16–28.

Aghion, P., & Howitt, P. (1992). A model of growth through creative destruction. Econometrica, 60, 323–351.CrossRef

Akpan, U. F., & Atan, J. A. (2016). Relationship between trade openness, institutions and economic growth in sub-Saharan Africa: A further look at the evidence. Journal of Economics, Management, and Trade, 15(1), 1–20.

Anderson, J. E., & Marcouiller, D. (2002). Insecurity and the pattern of trade: An empirical investigation. Review of Economics and Statistics, 84, 342–352.CrossRef

Aron, J. (2000). Growth and Institutions: A review of the evidence. World Bank Research Observer, 15, 99–135.CrossRef

Asiedu, M. K. (2013). Trade liberalization and growth: The Ghanaian experience. Journal of Economics and Sustainable Development, 4(5), 125–135.

Barro, R. J. (1997). Determinants of economic growth: A cross-country empirical study. MIT Press.

Bernard, A., & Jones, C. (1996). Productivity and convergence across U.S. states and industries. Empirical Economics, 21(1), 113–135.

Bosco, B., & Poggi, A. (2020). Middle class, government effectiveness and poverty in the EU: A dynamic multilevel analysis. Review of Income and Wealth, 66(1), 94–125.CrossRef

Chang, R., Kaltani, L., & Loayza, N. V. (2009). Openness can be good for growth: The role of policy complementarities. Journal of Development Economics, 90, 33–49.CrossRef

Coe, D., & Helpman, E. (1995). International R&D spillovers. European Economic Review, 39, 859–887.CrossRef

Djankov, S., McLiesh, C., & Ramalho, R. (2006). Regulation and growth. Economics Letters, 92(3), 395–401.CrossRef

Dickey, D. A., & Fuller, W. A. (1979). Distribution of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association, 74(366a), 427–431.CrossRef

Dickey, D. A., & Fuller, W. A. (1981). Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica: Journal of the Econometric Society, 49(4), 1057–1072.

Doan, H. Q. (2019). Trade, institutional quality and income: Empirical evidence for sub-Saharan Africa. Economies, 7(2), 1–23.CrossRef

Duodu, E., Baidoo, S. T., & Lau, E. (2020). How does quality of institutions affect the impact of trade openness on economic growth of Ghana? Cogent Economics and Finance, 8(1), 1812258.CrossRef

Engle, R. F., & Granger, C. W. J. (1987). Co-integration and error correction representation: Estimation and testing. Econometrica, 55, 251–276.CrossRef

Farole, T., Rodriguez-Pose, A., & Storper, M. (2011). Cohesion policy in the European Union: Growth geography. Institutions, Journal of Common Market Studies, 49, 1089–1111.CrossRef

Fenira, M. (2015). Trade openness and growth in developing countries: An analysis of the relationship after comparing trade indicators. Asian Economic and Financial Review, 5, 468–482.CrossRef

Glaeser, E.L., La Porta, R., López-de-Silanes, F., & Shleifer, A. (2004). Do institutions cause growth? Journal of Economic Growth, 9, 271–303.

Grossman, G. M., & Helpman, E. (1989). Product development and international trade. Journal of Political Economy, 97, 1261–1283.CrossRef

Grossman, G. M., & Helpman, E. (1991). Quality ladders and product cycles. Quarterly Journal of Economics, 106(2), 557–586.CrossRef

Hadhek, Z., & Mrad, F. (2015). Trade openness, institutions and economic growth. European Journal of Economics, Finance and Administrative Sciences, 75, 96–104.

Hall, R. E., & Jones, C. I. (1999). Why do some countries produce so much more output per worker than others? The Quarterly Journal of Economics, 114(1), 83–116.CrossRef

Hye, Q. M., Wizarat, S., & Lau, W.-Y. (2016). The impact of trade openness on economic growth in China: An empirical analysis. The Journal of Asian Finance, Economics and Business, 3, 27–37.CrossRef

Iqbal, N., & Daly, V. (2014). Rent seeking opportunities and economic growth in transitional economies. Economic Modelling, 37, 16–22.CrossRef

Johansen, S. (1992). Determination of cointegration rank in the presence of a linear trend. Oxford Bulletin Economics and Statistics, 54, 383–397.CrossRef

Johansen, S., & Juselius, K. (1990). Maximum likelihood estimation and inference on cointegration, with applications to the demand for money. Oxford Bulletin Economics Statistics, 52, 169–210.CrossRef

Jones, E. L. (1987). The European miracle: environments, economies, and geopolitics in the history of Europe and Asia. Cambridge University Press.

Jude, C., & Levieuge, G. (2015). Growth effect of FDI in developing economies: The role of institutional quality. Working papers 559, Banque de France.

Keho, Y., & Grace Wang, M. (2017). The impact of trade openness on economic growth: The case of Cote d’Ivoire. Cogent Economics and Finance, 5(1), 1–14.CrossRef

Keller, K. L. (1998). Strategic brand management. Prentice Hall.

Kim, D.-H., & Lin, S. (2009). Trade and growth at different stages of economic development. Journal of Development Studies, 45, 1211–1224.CrossRef

Klasra, M. A. (2011). Foreign direct investment, trade openness and economic growth in Pakistan and Turkey: An investigation using bounds test. Quality and Quantity, 45, 223–231.CrossRef

Knack, S., & Keefer, P. (1995). Institutions and economic performance: Cross-country tests using alternative institutional measures. Economics and Politics, 7, 207–227.CrossRef

Krueger, A., & Berg, A. (2003). Trade, growth, and poverty: A selective survey. IMF working paper, WP/03/30, International Monetary Fund, Washington.

Kwiatkowski, D., Phillips, P. C., Schmidt, P., & Shin, Y. (1992). Testing the null hypothesis of stationarity against the alternative of a unit root: How sure are we that economic time series have a unit root? Journal of Econometrics, 54(1–3), 159–178.CrossRef

Lawal, A. I., Nwanji, T. I., Asaleye, A., & Ahmed, V. (2016). Economic growth, financial development, and trade openness in Nigeria: An application of the ARDL bound testing approach. Cogent Economics and Finance, 4, 1–15.CrossRef

Lucas, R. E. (1988). On the mechanics of economic development. Journal of Monetary Economics, 46(1), 167–182.

Mauro, P. (1995). Corruption and growth. The Quarterly Journal of Economics, 110(3), 681–712.CrossRef

Melitz, M. J. (2003). The impact of trade on intra-industry reallocations and aggregate industry productivity. Econometrica, 71, 1695–1725.CrossRef

Mireku, K., Animah Agyei, E., & Domeher, D. (2017). Trade openness and economic growth volatility: An empirical investigation. Cogent Economics and Finance, 5(1), 1–11.

Narayan, P. K. (2005). The saving and investment nexus for China: Evidence from cointegration tests’. Applied Economics, 37(17), 1979–1990.CrossRef

North, D. C. (1981). Institutions and economic growth: An historical introduction. World Development, 17(9), 1319–1332.CrossRef

North, D. C. (1990). Institutions, institutional change, and economic performance. Cambridge University Press.CrossRef

Olson, M. (1982). The rise and decline of nations: Economic growth, stagflation and social rigidities. Yale University Press.

Phillips, P. C., & Perron, P. (1988). Testing for a unit root in time series regression. Biometrika, 75(2), 335–346.CrossRef

Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326.CrossRef

Peter, K. S., Svejnar, J., & Terrell, K. (2012). Foreign investment, corporate ownership, and development: Are firms in emerging markets catching up to the world standard? Review of Economics and Statistics, 94, 981–991.CrossRef

Polat, A., Shahbaz, M., Rehman, I. U., & Satti, S. L. (2015). Revisiting linkages between financial development, trade openness and economic growth in South Africa: Fresh evidence from combined cointegration test. Quality and Quantity, 49, 785–803.CrossRef

Rassekh, F. (2007). Is international trade more beneficial to lower-income economies? An empirical inquiry. Review of Development Economics, 11, 159–169.CrossRef

Rigobon, R., & Rodrik, D. (2005). Rule of law, democracy, openness, and income: Estimating the interrelationships. The Economics of Transition, 13, 533–564.CrossRef

Rodrik, D., & Rodriguez, F. (2001). Trade policy and economic growth: a skeptic’s guide to the cross-national evidence. In B. Bernnke, & K. Rogoff (Eds.), NBER macroeconomics annual 2000 (vol. 15, pp. 261–325). MIT Press.

Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98, S71–S102.CrossRef

Sakyi, D., Villaverde, J., & Maza, A. (2015). Trade openness, income levels, and economic growth: The case of developing countries, 1970–2009. The Journal of International Trade and Economic Development, 24, 860–882.CrossRef

Scully, G. W. (1988). The institutional framework and economic development. Journal of Political Economy, 96, 652–662.CrossRef

Shahbaz, M. (2012). Does trade openness affect long-run growth? Cointegration, causality, and forecast error variance decomposition tests for Pakistan. Economic Modelling, 29, 2325–2339.CrossRef

Solow, R. M. (1957). Technical change and the aggregate production function. Review of Economics and Statistics, 39, 312–320.CrossRef

Ullah, B. (2020). Financial constraints, corruption, and SME growth in transition economies. The Quarterly Review of Economics and Finance, 75, 120–132.CrossRef

Titel: Do Institutional Quality and Trade Openness Influence Economic Growth? An Empirical Evidence from India
verfasst von: Arun Kumar Giri
Geetilaxmi Mohapatra
Verlag: Springer Singapore
Buch: Studies in International Economics and Finance
Print ISBN: 978-981-16-7061-9

Electronic ISBN: 978-981-16-7062-6

Copyright-Jahr: 2022
DOI: https://doi.org/10.1007/978-981-16-7062-6_9

Springer Professional

Abstract

Bitte loggen Sie sich ein, um Zugang zu Ihrer Lizenz zu erhalten.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Springer Professional "Wirtschaft"

Premium Partner