Please use this identifier to cite or link to this item:
|Scopus||Web of Science®||Altmetric|
|Title:||Trade openness and government size of small developing countries: an instrumental approach|
|Citation:||Economics of Transition, 2014; 22(4):783-808|
|Faqin Lin, Bing Li and Nicholas C. S. Sim|
|Abstract:||This paper examines the causal effect that trade openness has on government size in small developing countries (SDCs). We use the construction of the trade cost variables based on Baltic Dry Index in primary goods as instruments of trade openness to address the endogeneity issue. We find that the increase in trade openness leads to an increase in government size: a 1 percent expansion in trade openness (trade GDP ratio) raises government consumption over GDP ratio by approximately 0.1– 0.2 percentage points on average. Its quantitative significance emphasizes the importance of rethinking the costs and benefits of trade openness for SDCs.|
|Keywords:||Trade openness; government size; BDI cost|
|Rights:||© 2014 The Authors Economics of Transition © 2014 The European Bank for Reconstruction and Development.|
|Appears in Collections:||Economics publications|
Files in This Item:
There are no files associated with this item.
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.