| Abstract: | This paper examines the influence of trade liberalization on GDP growth during the transition from communism. The level of trade liberalization is found to raise the growth rate, particularly in the early part of the transition and for the countries nearest to the European Union. For the remaining countries and for the later transition period, the positive influence of trade reform on growth requires the negative effect of the interaction between trade reform and privatization to be taken into account. Even with the interaction terms the effect of trade liberalization is not statistically significant in the later transition period. |
