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Trade Globalization

topic v1.0.0 2026-04-05 Agent-extracted

How trade openness tariff policy and global value chain participation affect economic growth inequality and development

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Domain: International Trade and Globalization

How trade openness tariff policy and global value chain participation affect economic growth inequality and development

Period: 1960-present Population: Countries worldwide Level: macro

Overview

6
Constructs
6
Findings
3
Engines

Constructs

merchandise_exports_gdp_pct Merchandise Exports Share of GDP

Total merchandise exports as percentage of GDP measuring goods export dependency

applied_tariff_rate_weighted Applied Tariff Rate Weighted

Trade-weighted mean applied tariff rate across all product categories reflecting actual trade barriers

trade_balance_gdp Trade Balance as GDP Share

Net exports of goods and services as percentage of GDP with positive values indicating trade surplus

gvc_participation_index GVC Participation Index

Share of exports involving cross-border production stages measured by foreign value added content in exports

terms_of_trade_index_2015 Terms of Trade Index

Ratio of export prices to import prices with 2015 as base year equals 100 measuring relative trade advantage

trade_openness_gdp Trade Openness

Sum of exports and imports of goods and services as share of GDP measured as percentage reflecting overall trade integration

Findings

Natural resource abundance negatively predicts economic growth (beta=-0.09, p<.01 on resource exports/GDP), controlling for initial income, openness, investment, and rule of law.

Direction: negative Confidence: strong Effect: β=-0.09, p<.01 Method: cross-country OLS growth regression

Resource-rich economies suffer from Dutch disease: resource booms appreciate the real exchange rate and crowd out manufacturing, reducing long-run growth potential.

Direction: negative Confidence: moderate Method: cross-country growth decomposition

Trade openness is positively associated with GDP per capita growth but the relationship is sensitive to instrumental variable choice and estimation method

Direction: positive Confidence: moderate Method: instrumental variable regression

Tariff reductions are associated with faster economic growth in developing countries particularly in the post-1990 liberalization period

Direction: negative Confidence: moderate Method: cross-country growth regression

Global value chain participation is positively associated with manufacturing productivity growth through technology transfer and specialization gains

Direction: positive Confidence: moderate Method: panel data analysis

Terms of trade volatility is negatively associated with economic growth in commodity-dependent economies through investment uncertainty channels

Direction: negative Confidence: strong Method: GMM dynamic panel estimation

Engines

ols_regression instrumental_variables gmm_estimation

Sources

Jeffrey D. Sachs, Andrew M. Warner (1995). Natural Resource Abundance and Economic Growth
Frankel, Jeffrey, Romer, David (1999). Does trade cause growth DOI
Rodriguez, Francisco, Rodrik, Dani (2000). Trade policy and economic growth a skeptics guide to the cross-national evidence
World Bank, World Trade Organization (2020). Trading for development in the age of global value chains

Tags

topictrade-globalization

Details

Domain: International Trade and Globalization

How trade openness tariff policy and global value chain participation affect economic growth inequality and development

Temporal scope: 1960-present | Population: Countries worldwide

Key Findings

  • Natural resource abundance negatively predicts economic growth (beta=-0.09, p<.01 on resource exports/GDP), controlling for initial income, openness, investment, and rule of law. (negative, strong)
  • Resource-rich economies suffer from Dutch disease: resource booms appreciate the real exchange rate and crowd out manufacturing, reducing long-run growth potential. (negative, moderate)
  • Trade openness is positively associated with GDP per capita growth but the relationship is sensitive to instrumental variable choice and estimation method (positive, moderate)
  • Tariff reductions are associated with faster economic growth in developing countries particularly in the post-1990 liberalization period (negative, moderate)
  • Global value chain participation is positively associated with manufacturing productivity growth through technology transfer and specialization gains (positive, moderate)
  • Terms of trade volatility is negatively associated with economic growth in commodity-dependent economies through investment uncertainty channels (negative, strong)

Installation

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