openness trade china and india外文电子书籍.PDF

The European Journal of Comparative Economics Vol. 8, n. 1, pp. 129-154 ISSN 1722-4667 China and India: Openness, Trade and Effects on Economic Growth 1 2 Enrico Marelli and Marcello Signorelli Abstract3 The purpose of this paper is to analyse the economic growth of China and India in terms of their integration in the global economy. We begin with a discussion of some stylized facts concerning their recent economic growth, the most significant institutional reforms, with particular reference to trade relations, and their impact on their economic development. We then propose a descriptive analysis of economic growth, opening up of the economies and trade specialisation, by comparing the features and trends of the two countries (by considering trade and foreign direct investment data). We have also estimated some econometric relations between economic growth and trade/openness, with the addition of control variables (such as the gross fixed capital formation). We initially used a panel data model for the two countries, to be estimated with fixed effects; to test for reverse causality, we re-estimated the fixed effects model by 2SLS (with the inclusion of specific instrumental variables). The effect on economic growth (in terms of GDP per capita) of our variables of interest - Openness and FDI – remains positive and statistically significant in all specifications, which confirms our findings even if we treat these variables as endogenous variables. The results prove the positive growth effects, for the two countries, of opening up and integ