Effect of trade openness on regional economic growth in China: revisiting the discussion |
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| Authors: | Junying Ma Jinchuan Shi Yi Che |
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| Institution: | 1. Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai, China;2. Center for Research of Private Economy, Zhejiang University, Hangzhou, China;3. College of Economics, Zhejiang University, Hangzhou, China |
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| Abstract: | Increasing openness contributes to economic growth in developing countries, but the endogeneity problem impedes drawing this conclusion. This paper uses the constructed trade share to circumvent the effects of endogeneity according to a method proposed by Frankel and Romer. The results demonstrate that increasing openness has a positive impact on provinces’ GDP and GDP per capita. In addition, an increase in lagged openness is beneficial for present economic growth, and even openness gained many years ago, which is measured by the number of treaty ports, makes a difference in present economic growth. |
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| Keywords: | Economic growth endogeneity problem gravity equation trade openness |
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