monireh rafat; Mostafa Emadzadeh; Zahra Ghandehary Alavijeh
Abstract
Globalization and economic openness, by raising external risks, increase the presence and interference of governments to support domestic economy. However, by integrating markets and creating competition in private sector, globalization decreases the presence of government in the economy. In this paper, ...
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Globalization and economic openness, by raising external risks, increase the presence and interference of governments to support domestic economy. However, by integrating markets and creating competition in private sector, globalization decreases the presence of government in the economy. In this paper, under the theoretical framework of compensatory and efficiency hypotheses, the relationship between government size and economic openness in the long- and short-term is investigated for select member countries of Organization of Islamic Cooperation for period 1998-2015. The designed model is estimated by using vector autoregressive (VAR) and the two-stage least squares (2SLS) methods. The results of vector error correction model (VECM) estimation show that in short run, government size, population and financial openness influence government size. In the long run, urbanization and population variables have the greatest impact on government size. The effect of financial openness on government size in the long run is decreasing, but the effect of the trade openness is increasing. The results of 2SLS estimation also show that the effect of efficiency hypothesis on the size of the government cannot outweight the incremental effect of the compensatory hypothesis and, as a result, with increasing economic openness in these countries, government size has become larger.
YAHYA FATHI; Mohammadgholi Yousefi
Abstract
Empirical studies show that establishment of World Trade Organization (WTO) had a significant role in increasing growth of international trade. After removal of international sanctions, membership in WTO is one of the most important economic challenges for Iran. The aim of this paper is to investigate ...
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Empirical studies show that establishment of World Trade Organization (WTO) had a significant role in increasing growth of international trade. After removal of international sanctions, membership in WTO is one of the most important economic challenges for Iran. The aim of this paper is to investigate the potential effects of trade negotiations and WTO membership on growth of manufacturing industries, by exploring and simulating based on experiences of acceded countries. To meet this end, we estimated an endogenous economic growth model, using longitudinal data from 179 countries, including 36 newly acceded countries, during the period 1980 to 2015, with dynamic panel data and instrumental variables (Panel GMM) approach. We have used the proportion of value added in manufacturing sector to GDP as a proxy for industrial growth. Also, we have included two dummy variables for negotiation process and membership period to separate the effects related to each of them. Our results show that there is a positive and significant relationship between growth of manufacturing sector and WTO accessing negotiation process, as well as WTO membership. It means that, the effects of accession to the WTO on growth of manufacturing sector is not limited to the period after the full membership, but also - because of required reforms in the economic institutions and policies - the process of accession negotiations can affect economic growth as well.
Asadollah Jalalabadi; Javid Bahrami
Volume 11, Issue 42 , October 2011, , Pages 213-247
Abstract
Due to uncertainty in economic growth theories, existence of various proxies for
effective factors on economic growth, and lack of indication of the most appropriate
econometric model for investigating effective variables on economic growth, the empirical
growth regressions have always faced uncertainty. ...
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Due to uncertainty in economic growth theories, existence of various proxies for
effective factors on economic growth, and lack of indication of the most appropriate
econometric model for investigating effective variables on economic growth, the empirical
growth regressions have always faced uncertainty. To investigate this phenomenon, we
should move from the classical econometrics towards the approaches which can
appropriately deal with uncertainty. One of these approaches is the !Bayesian Averaging of
Classical Estimates Approach" which has been used in this article to evaluate the uncertainty
of the effects of trade openness on economic growth in developing countries (52 countries)
during 1970 and 2006. The research findings indicate that the !Composite Trade Intensity"
which is considered as a suitable alternative for trade openness, has a positive and definite
effect on economic growth of these countries in the long run. Furthermore, it is revealed that
other criteria such as !Unweighted Averages of Tariff Rates", !Terms of Trade Growth" and
!Sachs & Warner openness indicator" (1995) # as proxies for trade openness # do not have
definite and determining effects on economic growth of these countries in the long run.
