How Much Do Trading Partners Matter for Economic Growth?

Author/Editor:

Vivek B. Arora ; Athanasios Vamvakidis

Publication Date:

February 1, 2004

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper empirically examines the extent to which a country's economic growth is influenced by its trading partner economies. Panel estimation results based on four decades of data for over 100 countries show that trading partners' growth and relative income levels have a strong effect on domestic growth, even after controlling for the influence of common global and regional trends. One interpretation is that conditional convergence is stronger, the richer are a country's trading partners. A general implication of the results is that industrial countries benefit from trading with developing countries, which grow rapidly, while developing countries benefit from trading with industrial countries, which have relatively high incomes.

Series:

Working Paper No. 04/26

Subject:

English

Publication Date:

February 1, 2004

ISBN/ISSN:

9781451844412/1018-5941

Stock No:

WPIEA0262004

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

21

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