Trade Liberalization and Growth: New Evidence

A new data set of on openness indicators and trade liberalization dates allows the 1995 Sachs and Warner study on the relationship between trade openness and economic growth to be extended to the 1990s. New evidence on the time paths of economic growth, physical capital investment, and openness arou...

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Bibliographic Details
Main Authors:	Wacziarg, Romain, Horn Welch, Karen
Format:	Journal Article
Published:	World Bank 2012
Subjects:	capital accumulation developing countries economic liberalization growth rates international trade liberalization physical capital investment public equity share trade
Online Access:	http://hdl.handle.net/10986/4477

id	okr-10986-4477
recordtype	oai_dc
spelling	okr-10986-44772021-04-23T14:02:18Z Trade Liberalization and Growth: New Evidence Wacziarg, Romain Horn Welch, Karen capital accumulation developing countries economic liberalization growth rates international trade liberalization physical capital investment public equity share trade A new data set of on openness indicators and trade liberalization dates allows the 1995 Sachs and Warner study on the relationship between trade openness and economic growth to be extended to the 1990s. New evidence on the time paths of economic growth, physical capital investment, and openness around episodes of trade policy liberalization is also presented. Analysis based on the new data set suggests that over the 1950–98 period, countries that liberalized their trade regimes experienced average annual growth rates that were about 1.5 percentage points higher than before liberalization. Postliberalization investment rates rose 1.5–2.0 percentage points, confirming past findings that liberalization fosters growth in part through its effect on physical capital accumulation. Liberalization raised the average trade to GDP ratio by roughly 5 percentage points, suggesting that trade policy liberalization did indeed raise the actual level of openness of liberalizers. However, these average effects mask large differences across countries. 2012-03-30T07:12:37Z 2012-03-30T07:12:37Z 2008-05-30 Journal Article World Bank Economic Review 1564-698X http://hdl.handle.net/10986/4477 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank World Bank Journal Article Indonesia China Mexico Korea, Republic of Botswana
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	capital accumulation developing countries economic liberalization growth rates international trade liberalization physical capital investment public equity share trade
spellingShingle	capital accumulation developing countries economic liberalization growth rates international trade liberalization physical capital investment public equity share trade Wacziarg, Romain Horn Welch, Karen Trade Liberalization and Growth: New Evidence
geographic_facet	Indonesia China Mexico Korea, Republic of Botswana
description	A new data set of on openness indicators and trade liberalization dates allows the 1995 Sachs and Warner study on the relationship between trade openness and economic growth to be extended to the 1990s. New evidence on the time paths of economic growth, physical capital investment, and openness around episodes of trade policy liberalization is also presented. Analysis based on the new data set suggests that over the 1950–98 period, countries that liberalized their trade regimes experienced average annual growth rates that were about 1.5 percentage points higher than before liberalization. Postliberalization investment rates rose 1.5–2.0 percentage points, confirming past findings that liberalization fosters growth in part through its effect on physical capital accumulation. Liberalization raised the average trade to GDP ratio by roughly 5 percentage points, suggesting that trade policy liberalization did indeed raise the actual level of openness of liberalizers. However, these average effects mask large differences across countries.
format	Journal Article
author	Wacziarg, Romain Horn Welch, Karen
author_facet	Wacziarg, Romain Horn Welch, Karen
author_sort	Wacziarg, Romain
title	Trade Liberalization and Growth: New Evidence
title_short	Trade Liberalization and Growth: New Evidence
title_full	Trade Liberalization and Growth: New Evidence
title_fullStr	Trade Liberalization and Growth: New Evidence
title_full_unstemmed	Trade Liberalization and Growth: New Evidence
title_sort	trade liberalization and growth: new evidence
publisher	World Bank
publishDate	2012
url	http://hdl.handle.net/10986/4477
_version_	1764391535358509056

Trade Liberalization and Growth: New Evidence

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