Old wine in a new bottle: Trade openness and fdi flows-are the emerging economies converging?

Apergis, Nicholas, and Cooray, Arusha (2016) Old wine in a new bottle: Trade openness and fdi flows-are the emerging economies converging? Contemporary Economic Policy, 34 (2). pp. 336-351.

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Abstract

This study uses the club convergence methodology of Phillips and Sul (2007) for emerging economies spanning the period 1960-2013 to explore whether such convergence exists and whether the increase of international trade and foreign direct investment (FDI) flows has been a global or club phenomenon. We find the absence of a homogeneous convergence club. The results for FDI outflows also reach similar conclusions, suggesting the formation of convergence clubs by stage of development. These results suggest that policies that promote convergence in trade openness and FDI flows would permit countries to benefit from mutual interactions and by greater consistency and efficiency in trade regimes, thus permitting these countries to benefit from openness leading to a race to the top rather than bottom.

Item ID: 69196
Item Type: Article (Research - C1)
ISSN: 1465-7287
Copyright Information: © 2015 Western Economic Association International
Date Deposited: 06 Jul 2022 01:11
FoR Codes: 38 ECONOMICS > 3801 Applied economics > 380110 International economics @ 100%
SEO Codes: 15 ECONOMIC FRAMEWORK > 1501 International trade policy > 150103 Trade policy @ 100%
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