The Role of Institutional Quality in Trade-Growth Nexus: The Case of Emerging Economies

Authors

  • Muhammad Atiq-ur- Rehman Assistant Professor, Department of Economics, Higher Education Department, Punjab, Pakistan
  • Hafeez-ur- Rehman Chairman, School of Business Economics, University of Management and Technology, Lahore, Pakistan
  • Fatima Farooq Associate Professor, School of Economics, Bahauddin Zakariya University, Multan, Pakistan
  • Furrukh Bashir Assistant Professor, School of Economics Bahauddin Zakariya University Multan, Pakistan

DOI:

https://doi.org/10.47067/ramss.v4i1.112

Keywords:

Trade Openness, Institutions, Economic Growth, Dynamic Panel Data

Abstract

This study aims at investigating the relationship between trade openness and economic growth after incorporating the role of institutions. Generalized method of moments (GMM) system technique is applied by using data of 17 major emerging market economies (EMEs) for the period 1995-2018. The empirical evidence suggests that trade liberalization affects economic growth positively and significantly while institutions play a supportive role in this regard. The interaction terms are also generated to test the impact of the institutional environment on the trade-growth relationship. The empirical results are robust to various specifications, confirming the positive role of institutions in trade- growth nexus. The countries should develop a conducive institutional and political environment to ensure the beneficial growth effects of trade liberalization policy.

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Published

2021-03-31

How to Cite

Rehman, M. A.- ur-., Rehman, H.- ur-., Farooq, F. ., & Bashir, F. . (2021). The Role of Institutional Quality in Trade-Growth Nexus: The Case of Emerging Economies. Review of Applied Management and Social Sciences, 4(1), 205-213. https://doi.org/10.47067/ramss.v4i1.112

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