NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Testing for Trade-Induced Investment-Led Growth

Richard E. Baldwin, Elena Seghezza

NBER Working Paper No. 5416
Issued in January 1996
NBER Program(s):   ITI

Many studies have found a positive correlation between trade and growth, but do not attempt to identify the economic mechanisms involved. This paper attempts to identify one of the mechanisms linking trade and growth. In particular, we present a novel theoretical model that establishes a link between trade liberalization and investment-led growth. Estimating equations are derived from the model and estimated with three stage least squares on a cross-country data sample. We find that domestic protection depresses investment and thereby slows growth. Foreign trade barriers also lower domestic investment, but the anti-investment effect is weaker and is less robust to sample and specification changes.

download in pdf format
   (443 K)

email paper

This paper is available as PDF (443 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w5416

Published: Seghezza, Elena & Baldwin, Richard E., 2008. "Testing for Trade-Induced Investment-Led Growth," Economia Internazionale / International Economics, Camera di Commercio di Genova, vol. 61(2-3), pages 507-537. citation courtesy of

Users who downloaded this paper also downloaded these:
Baldwin and Seghezza w5582 Trade-Induced Investment-led Growth
Lawrence and Weinstein w7264 Trade and Growth: Import-Led or Export-Led? Evidence From Japan and Korea
Edwards w5978 Openness, Productivity and Growth: What Do We Really Know?
Wacziarg and Horn Welch w10152 Trade Liberalization and Growth: New Evidence
Baldwin w9578 Openness and Growth: What's the Empirical Relationship?
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us