Economics Research Institute Study Paper
Utah State University Department of Economics
This paper presents empirical evidence of the effects of trade on economic growth. The main contribution of this study is that the "cumulated past volume of exports and imports" is taken as the carrier of knowledge or the source of externality, while the previous studies assume that only the export sector generates positive externalities. We also investigate the contribution of exports as a source of foreign exchange. The empirical test on 119 countries indicates that trade, being the carrier of knowledge, plays an important role in contributing to economic growth. However, the empirical test does not show any correlation between exports and the reduction of import shortage, which is presumed to be a binding constraint on output growth.
Sim, Wooill and Biswas, Basudeb, "Trade as a Carrier of Knowdedge in Economic Growth" (1999). Economic Research Institute Study Papers. Paper 157.