Last modified: 2014-10-24
Abstract
This paper examines the long-run relationship between trade openness and economic growth in Singapore and Malaysia over the period 1960-2013. It is often argued that more outward-oriented countries register better economic growth performance in the long run. We use two groups of trade openness measures and the GMM, SUR and 3SLS estimation techniques to establish the links and causality between trade openness, growth and income distribution. Our preliminary results show trade openness plays a key role in economic growth in both Singapore and Malaysia. In addition, trade barriers seem to have negative impact on growth and are consistence with the conventional view on the growth effects of trade barriers.
JEL Codes: F10, O11, C11
Keywords: Growth, Openness, Trade Barriers, Singapore, Malaysia