Click here for search results
Trade, regulations, and growth
 
Author:Bolaky, Bineswaree; Freund, Caroline; Collection Title:Policy, Research working paper ; no. WPS 3255
Country:World; Date Stored:2004/04/20
Document Date:2004/04/01Document Type:Policy Research Working Paper
SubTopics:Environmental Economics & Policies; Governance Indicators; Achieving Shared Growth; Payment Systems & Infrastructure; Economic Theory & Research; Free Trade; Health Monitoring & Evaluation; Public Health PromotionLanguage:English
Major Sector:Industry and tradeRegion:The World Region
Report Number:WPS3255Sub Sectors:General industry and trade sector
Volume No:1 of 1  

Summary: Trade does not stimulate growth in economies with excessive business and labor regulations. The authors examine the effect of openness on growth using cross-country regressions in both levels and changes. Results from the levels regressions imply that increased openness is associated with a lower standard of living in heavily-regulated economies. Growth regressions confirm that the effect of increased trade on growth is absent in these countries. The authors also find that once they control for the effect of trade on growth in heavily regulated economies, the evidence that trade positively affects growth is stronger than has been found in previous studies. Excessive regulations restrict growth because resources are prevented from moving into the most productive sectors and to the most efficient firms following liberalization. In addition, in highly regulated economies, increased trade is more likely to occur in the wrong goods-that is, goods where comparative advantage does not lie. The results imply that countries must create a sound business environment before trade can be used as an engine of growth.

Official Documents
Official, scanned versions of documents (may include signatures, etc.)
File TypeDescriptionFile Size (mb)
PDF 40 pagesOfficial version*2.8 (approx.)
TextText version**
How To Order
Light-Weight Documents
Lighter (less MB) documents which may or may not be the final, official version
File TypeDescriptionFile Size (mb)
PDF 40 pagesWPS32550.16

* The official version is derived from scanning the final, paper copy of the document and is the official,
archived version including all signatures, charts, etc.
** The text version is the OCR text of the final scanned version and is not an accurate representation of the final text.
It is provided solely to benefit users with slow connectivity.



Permanent URL for this page: http://go.worldbank.org/VQ97VOV4H0