How trade and foreign investment affect the growth of a small but not so open economy: Australia?

Iyer, Krishna G., Rambaldi, Alicia N. and Tang, Kam Ki (2009) How trade and foreign investment affect the growth of a small but not so open economy: Australia?. Applied Economics, 41 12: 1525-1532. doi:10.1080/00036840601032177

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Author Iyer, Krishna G.
Rambaldi, Alicia N.
Tang, Kam Ki
Title How trade and foreign investment affect the growth of a small but not so open economy: Australia?
Journal name Applied Economics   Check publisher's open access policy
ISSN 0003-6846
1466-4283
Publication date 2009-05
Sub-type Article (original research)
DOI 10.1080/00036840601032177
Volume 41
Issue 12
Start page 1525
End page 1532
Total pages 8
Editor L. Sarno
M. P. Taylor
Place of publication Abingdon, United Kingdom
Publisher Routledge
Collection year 2008
Language eng
Subject C1
340213 Economic Development and Growth
720300 International Trade Issues
Abstract This article analyses the impact of trade and foreign investment on a small but not so open economy, Australia, whose growth rate outpaced the majority of the OECD countries in the last decade. We model five channels of outward orientation: exports, imports, foreign direct investment, foreign portfolio investment and other foreign investment. A cointegrated vector autoregressive model, complemented by a robust Granger noncausality test, is specified to identify permanent channels of outward orientation. Imports and direct investment are found to have a growth effect in the long run. The effect of imports is almost three times that of direct investment.
Keyword Cointegration analysis
Foreign direct investment
Granger causality test
Growth rate
Import; modeling
OECD
Trade relations
Vector autoregression
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

 
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Created: Sun, 04 May 2008, 23:56:07 EST by Kaelene Matts on behalf of School of Economics