Trade and

Economic
Growth
Rosmah Sesu
ID: 20190687
Table of Content
• Introduction.
• Research Problem and Motivation.
• Literature Review.
• Methodology and Data Sources.
• Major Results.
• Conclusion.
• Policy Suggestions and Recommendation.

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 What is trade and
Economic Growth?
• Trade is a important economic term which
involves the purchase and sale by a buyer of
the products and services or the exchange
between parties of commodities or services.
• Economic growth is an increase in the value of
goods and services produced by an economy
over time
Research Problem & Motivation
• Trading with Developed Countries can be very biased.
• Preferences are subject to time-based differences.
• Trade can affected by different factors like geography, changeability in the
swapping scale, or exchange developments, they can't really mirror an
exchange strategy of a specific country
• The drive of this research is how can the developing countries can be still
trade in a favorable manner with the developed countries.

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 Literature Review

ARTICLES Discussion

ADMIN, G.  Shares of trade and growth.

Trade and Economic Growth: Theories and Evidence from  Trade with Developed Countries can be very biased
the Southern African Development Community. A new
 Trade Openness benefits
GLO Discussion Paper by GLO Fellow Almas Heshmati
and Matias Jaime Farahane.
(PDF) TRADE OPENNESS AND GROWTH: WHO
BENEFITS?

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 Literature Review

• Trade as an ENGINE of economic

growth. trade the market for a country’s
output. Exports lead to increase
enlarges in national output and become
an engine of growth

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Methodology & Data Sources
• The Research Method’s is comparative analysis of literature, statically
analysis, econometric analysis and system GMM method. The hypothesis in
this research review is that trade as an engine of economic growth and Free
trade.
• OLS regression .
• Panel data estimate techniques.
• Cobb–Douglas
• Prebisch-Singer hypothesis

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Major Results
1) There is biased in trading with DC.
The biased trade of the developing countries has occurred on account of the
following reasons:
• 1. Absence of Qualitative Improvement of Products
• 2. Distribution of Gains from Technical Progress
• 3. Immiserizing Growth
• 4. Low Income Elasticity of Demand
• 5. Impact of Import on the Import- Competing Industries.
• 6. Large Surpluses of Farm Products and a Few Others.

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Major Results cont
2) Free trade for economic growth.
 better, cheaper products.
3) Trade openness has a favorable effect on economic growth.
The positive relationship between trade openness and growth.

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Major Results cont
The gathered data from
four secondary
geographical regions
around Pacific regions,
Asian region, USA,
regions of Middle East
& regions of North
Africa and around
regions of Europe to
evaluate the world
patterns of trade and
growth between 1980
and 2009

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Major Results

• Trade shares in all areas, with

the exception of Middle East
and North Africa which had
significant commercial shares
at first compared with other
regions, were generally
raised. in 1991).

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Conclusion
Here I would like to conclude by saying that.
 Trade is an ‘engine’ of economic growth. Specialization , division of labour,
enhancement of productivity, posing challenges, development to meet them,
innovation and creation to meet the competition lead to overall Economic
growth of World as a whole.
 Free trade is good for economic growth.
 There is unfair in trading with developed countries.
Policy Implications and Recommendations.
• Free international trade is the best antimonopoly policy and the best
guarantee for maintaining free competition .
• Recommend that policymakers in the LDC should consider the acceptance
of economic policies aimed at supporting increased trade through raise of
export expansion.

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References
Admin, G., 2020. Trade and Economic Growth: Theories and Evidence from the Southern African Development
Community. A new GLO Discussion Paper by GLO Fellow Almas Heshmati and Matias Jaime Farahane.. [online] Global
Labor Organization (GLO). Available at: <https://glabor.org/trade-and-economic-growth-theories-and-evidence-from-the-
southern-african-development-community-a-new-glo-discussion-paper-by-glo-fellow-almas-heshmati-and-matias-jaime-
farahane/> [Accessed 6 June 2021].
Mpra.ub.uni-muenchen.de. 2021. The Impact of Trade Openness, Foreign Direct Investment and Domestic Investment on
Economic Growth: New Evidence from Asian Developing Countries - Munich Personal RePEc Archive. [online] Available
at: <https://mpra.ub.uni-muenchen.de/94453/> [Accessed 26 May 2021].
Didžgalvytė, M. and Osteikaitė, A., 2018. Relationship between economic openness and economic growth: issue of
openness measurement. Applied Economics: Systematic Research, 12(2), pp.13-28
Huchet, M., Mouël and Vijil, 2021. The relationship between trade openness and economic growth: some new insights on
the openness measurement issue. [online] Ideas.repec.org. Available at: <https://ideas.repec.org/p/hal/journl/hal-
00729399.html> [Accessed 13 May 2021].
ResearchGate. 2004. (PDF) Trade Openness and Growth: Who Benefits?. [online] Available at:
<https://www.researchgate.net/publication/5216248_Trade_Openness_and_Growth_Who_Benefits> [Accessed 2 June
2021].

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