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1  / 2022 /  pp.1 / 

10.1007/978-3-030-79534-4_1

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East Asian Economic Review Vol. 10, No. 1, 2006. pp. 29-56.

DOI https://dx.doi.org/10.11644/KIEP.JEAI.2006.10.1.151

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The Impact of Trade Diversity and Trading Partners on Domestic Economic Growth

Author

Taegi Kim

Chonnam National University

tgkim@chonnam.ac.kr

Kuseung Park

Chonnam National University

parknine@hanmail.net
Creative Commons Attribution License

EAER is an open access journal distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license.

Abstract

This paper studies the effects of trade diversity and trading partners on domestic economic growth for 69 countries during the period 1970~2000. We develop the index to measure trade diversity by using Herfindahl index and intra-industry trade index, and also calculate weighted average growth rate of trading partners using bilateral trade volume as weights. In addition, the variables, such as growth rate of investment, rate of inflation, and openness are included in regression analysis. The results show that trade affects economic growth; the economic growth rates are high in countries with high openness, the more commodity variety of exports and imports, the more variety of trading partners, and the high economic growth of trading partners. This paper suggests policy implications that we have to diversify trading commodities and trading partners as well as increase trade volume in order to maximize the positive effects of trade on economic growth.

JEL classification: F18, O11, O40, O43

Keywords

Trade Diversity, Trading Partners, Openness, Economic Growth

Language

Korean

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