Document Type

Article

Journal/Book Title/Conference

Economics Research Institute Study Paper

Volume

7

Publisher

Utah State University Department of Economics

Publication Date

1999

Rights

Copyright for this work is held by the author. Transmission or reproduction of materials protected by copyright beyond that allowed by fair use requires the written permission of the copyright owners. Works not in the public domain cannot be commercially exploited without permission of the copyright owner. Responsibility for any use rests exclusively with the user. For more information contact the Institutional Repository Librarian at digitalcommons@usu.edu.

First Page

1

Last Page

30

Abstract

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.

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