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http://dx.doi.org/10.13106/jafeb.2022.vol9.no3.0023

The Impact of Trade Openness on Economic Growth: Evidence from Agricultural Countries  

SIREGAR, Abi Pratiwa (Department of Agricultural Socio-economics, Faculty of Agriculture, Gadjah Mada University)
WIDJANARKO, Nadila Puspa Arum (Department of Agricultural Socio-economics, Faculty of Agriculture, Gadjah Mada University)
Publication Information
The Journal of Asian Finance, Economics and Business / v.9, no.3, 2022 , pp. 23-31 More about this Journal
Abstract
The study investigates the effect of trade openness on the economic growth of agricultural countries. The information of export, import, gross domestic product (GDP), Gross Fixed Capital Formation (GFCF), and population of 72 agrarian nations generated by the World Bank from 2011 until 2020 is used for data examination. Then, before panel data analysis, a preferred model is chosen from among common-effects, fixed-effects, and random effects. The best model turns out to be a fixed-effect model. The result reports that from 2011 to 2020; 16 out of 72 nations have succeeded in experiencing positive economic growth, the value of GFCF was US$ 2,859.04 billion, and later grew by 19 percent to US$ 3,393.73 billion, the population tends to increase continuously year by year, and 2 out of 72 countries experienced export plus import exceed their GDP. Moreover, trade openness is positively associated with economic growth, with a coefficient of 3.81. Besides that, an increase in GFCF may boost economic growth by approximately 3.32 percent. On the contrary, one percent additional population significantly delivers around 25.46 percent negative economic growth. To sum up, the higher intensity of products or services sold and bought abroad may enhance the economic performance.
Keywords
International Trade; Economic Development; Human Capital Development; Agriculture;
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Times Cited By KSCI : 7  (Citation Analysis)
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