International Trade and Economic Growth
Nexus: A Review
Agnieszka Wójcik-Czerniawska1* and Elroi Hadad2
1Department of Economics and Finance of Local Government, College of Management and Finance, Warsaw School of Economics, Poland
2Department of Industrial Engineering and Management, Shamoon Collage of Engineering (SCE), Israel
Submission: October 19, 2022; Published: November 02, 2022
*Corresponding author: Agnieszka WÓJCIK-CZERNIAWSKA, Associate Professor, Department of Economics and Finance of Local Government, College of Management and Finance, Warsaw School of Economics, Warsaw, Al Niepodległości 162, 02-554 Warsaw, Poland
How to cite this article:Agnieszka W-C, Elroi H. International Trade and Economic Growth Nexus: A Review. Ann Soc Sci Manage Stud. 2022; 8(1): 555727. DOI: 10.19080/ASM.2022.08.555727
The relationship between international trade and economic growth has been the focus of controversy in trade and development economics. Global trade is critical to the growth process, as mainstream economists Adam Smith and David Ricardo originally emphasized. On aggregate, trade between countries significantly has a higher growth rate, which has now been linked to trading in part. Nevertheless, almost all of the rises cannot be attributed to economic and commercial liberalization.
In this paper we study long-term relations between international trade and economic growth. Using qualitative analysis from several economic sources, we show that international trade and economic growth are intertwined, but also that monetary policies stability helps to improve the relationship, as negative financial drivers like inflationary pressures can stymie progress. The results suggest that international trade has only positive effects on economic growth, and that international trade has a large positive impact on economic prosperity, and capital and labor output elasticities have had both pro and con impacts on economic growth. Trade openness is also regarded to be significant, as lowering and removing trade barriers encourages trade growth and, as a result, economic growth.
Keywords: International trade; Development; Economic growth; Comparative advantage
Abbreviations: GDP: Gross Domestic Product; APEC: Asia and Pacific Economic Cooperation; FDI: Foreign Direct Investment
The influence of international trade on economic growth has sparked heated debate amongst scholars and practitioners, mainly in developing nations. The purpose of trade liberalization is to create an environment that supports the development of high-quality items that help the economy flourish. As a result, global trade is seen as a key engine of global economic development. Despite the fact that global trade flow has varied and been delayed by recurring trade barriers, many governments actively desire global commerce because of the enormous, societal benefits that it brings. As a result, trade’s position as something of a primary driver for economic advancement is increasing in importance, particularly so because area is rich in natural resources but lacks firms to turn them to consumer products and other intermediate products. As nothing more than a result, overseas trade in these commodities is necessary to support economic growth by supplementing domestic processing industries . To boost international trading activities, developing markets, particularly in Africa, have used trade strategies such as import substitution policies, currency exchange, taxes, and quantitative controls. The financial indirect consequences of international trade, including such gains in productivity, intellectual resources, improved management of the economy, better distribution of resources and utilization, tariffs and non-tariff volatility, and technology diffusion, are driving these trade agreements .
Since Adam Smith’s conversation of specialization talks around export-led growth vs. import substitution, economists studying the drivers of the standard of existing have been attentive to the potential of trade on economic development and growth. The connection between international trade and economic growth seems to have been a hot question in the development industry for a long time. Despite this, there is little evidence suggesting trade and income growth are intertwined. The importance and elusiveness of resolving the disputed concerns from both a theoretical and empirical standpoint are demonstrated by the potency and increased attention in development economics arguments about the connection between trade and growth.
In these debates, the fundamental issue of argument seems
to be whether economic and commercial policies are causal
or otherwise. These arguments are driven by the statistic that
determining the ceteris paribus influence of trade on economic
development is challenging because the direction of causality
cannot be ascertained just by looking at the two. Trade can affect
incomes by causing specialization due to comparative advantage,
misuse of economies of scale returns, knowledge exchange owing
to better-quality communication stations and travel, and science
and technology spillovers due to investment opportunities and
experience to new products and services, novel approaches of
production, and novel organizational structures.
Trade, given to traditional trade theory, endorses economic
development for the reason that it grounds capital redistribution,
and nations that trade are likely to also have a comparative
advantage meanwhile they specialize in producing and trading
to their trade agreements, resultant in amplified economic
growth. This has sparked a heated dispute among scholars and
practitioners and other scholars regarding whether or not global
commerce helps to increase economic growth. As a result, scholars
have conducted an amount of research to measure the influence
of global trade on the remainder of the continent’s economic
advancement. On the one pointer, several empirical research has
found that international commerce has a favorable influence on
On the other side, some studies say that international
commerce has an undesirable or unclear impact on countries
and the remainder of the world’s economic advancement. These
contradictory (inconclusive) conclusions continue to happen,
signaling that further investigation is warranted to address the
knowledge gap. In new years, digitalization has been recognized
for its contribution to long-term growth in the economy. Economic
growth will undoubtedly be spurred by the digitalization of the
economy. Digitalization allows for better utilization of human
resources and environmental assets, and also the building of
economic output in the extractive sectors.
Economic growth is one of each economy’s and company’s
major goals. Different measures are used to analyze economic
growth and performance at both the macroeconomic and
microeconomic levels. Their problem is that all of their metrics
are based on value-added. International trade has an impact on
both the country’s revenue and how firms operate. The global
trade balance is frequently used as a starting point for assessing
competitive advantages within a country’s economic structure,
particularly at the industry and sectorial level.
Although the link between commerce and growth has already
been recognized theoretically in economic literature, practically
establishing the link has proven problematic. In this regard,
the goal of this article is to demonstrate a long-term empirical
relation between international trade and economic growth. Many
countries have conducted empirical evidence on the influence
of foreign trade on economic development and performance.
We also provide an in-depth review of statistical or econometric
methodologies in the literature that relate international trade
and GDP growth and GDP growth, and the impact of international
trade on Economic growth.
We employ qualitative research to establish the long-term
relationship between international trade and economic growth.
Instead of developing a new data set using primary research
techniques, we use secondary data from several sources, namely
scholarly publications, books, government records, etc. To draw
reliable study conclusions, this research design organizes, collects,
and analyze these data samples.
International trade permits nations to enlarge their
marketplaces and get entree to products that would then be
inaccessible nationally. As a consequence of global trade, the
marketplace is becoming more aggressive. As a consequence,
prices become much fairer, resulting in a decreased cost product for
the customer. International commerce fostered the development
of the international economy. In the worldwide trade, market
forces, and thus prices, impact and are affected by world politics
. Political reform in Asia, for instance, might consequence in an
upsurge in work expenses. This might surge the production cost
for an American shoe firm operating in Malaysia, bringing about
an increase in the value funded for a couple of shoes bought at a
native mall by an American consumer.
To study the effect of international trade and economic growth,
several studies use the econometric model of the form
whereby is the log difference of the gross domestic product
per capita (GDP), is the international trade variable and is exogenous variable, and is the error term. In the next sections,
we cover several theoretical studies that include international
trade and exogenous variables to study their effect on economic
A commodity that’s also provided to the foreign arena is an
export, even though a commodity that’s also accepted from the
foreign arena is an import. Imports and exports are considered for
in the present version unit of a firm’s financial statements.
Richer nations can create excellent use of their assets,
including labor, knowledge, and finance, cheers to international
commerce. Land, labor, finance, and knowledge, among many
other factors, are unique resources and environmental assets in
separate jurisdictions. This permits some nations to yield the very
similar invention more cost-effectively, i.e. quickly and at a lower
cost. As a consequence, they might be capable to market it for fewer than other nations. If a nation becomes unable to produce a product efficiently, it can gain it by partnering with a nation that
can. This is considered to be a specialization in a global line of
For instance, due to their comparative advantages, either
England or Portugal have promoted specialization and exporting
in the past. Portugal has several wineries and can generate lowcost
wines, while England’s pastures are plentiful with sheep,
enabling it to manufacture low-cost cloth. Each nation would
ultimately appreciate these realities and cast off capability to
develop the more costly product nationally in favor of export.
Over history, England clogged selling wine and Portugal refused
to sell cloth. Both nations concluded that this was to their greatest
advantage to stop releasing this stuff at home-based rather than
commerce for them .
These two countries learned that focusing on items in which
they have a modest advantage allows them to yield more. In this
example, the Portuguese would focus exclusively on winemaking,
whereas the English will focus exclusively on cotton cultivation.
Every country may currently produce 20 specialist production
plants each year and export the very same amount of both. As
a result, in each nation, both of these products are now more
accessible. We can understand that the prospective process of
making both commodities is more than the price of specialization
for both countries.
Comparative advantage contrasts with absolute advantage.
Absolute advantage results in indisputable profits from
specialization and commerce solely when every supplier has
an advantage in making a good. If a company does not have an
absolute advantage, it will never sell something. Those countries
with a comparative advantage, on the other hand, profit from
commerce although they will not have a strong absolute edge.
The model of comparative advantage is recognized by David
Ricardo, an English political economist. Even if it has been
recommended that Ricardo’s instructor, James Mill, devised the
theory and sneaked it into Ricardo’s book on the back of a napkin,
comparative advantage is addressed in Ricardo’s 1817 book On
the Principles of Political Economy and Taxation .
As we’re seeing, comparative advantage notably illustrates
how specialized and trading focuses on the comparative
advantages benefits both England and Portugal. In this situation,
Portugal was capable of making wine at a minimal price, while
England was capable of creating cloth at a minimal price. As per
Ricardo, every nation would finally grasp these principles and
stop seeking to make more luxury products.
Another more notable instance of comparative advantage
is China’s competitive advantage over the US States in the type of economy labor. China produces simple commodities at a significantly lower price. In specialized, capital-intensive labor,
the United States has a competitive advantage. American labor
provides advanced items or speculation chances with the reduced
opportunity overhead. Expertise and commerce along these
principles help each nation.
Protectionism has largely failed, and the concept of
comparative advantage can partly clarify why. When a nation
leaves a global trade deal or applies tariffs, this could lead to an
instant resident advantage in the shape of more occupations. This
is seldom a long-term remedy to a trading issue, though. That
nation will eventually be at a deficit in contrast to its neighbors,
who can still produce these items at a lower economic cost .
Worldwide commerce not only boosts productivity but also
assists nations in integrating into the worldwide industry, which
supports FDI (FDI). In theory, countries will be capable of growing
more effectively and competitively as a result of this. FDI is a way
for the receiving state to attract foreign capital and expertise. It
creates jobs and, in principle, raises the gross domestic product
(GDP). FDI helps a firm to continue expanding, leading to much
more revenue for the owner.
The free trade hypothesis is easier for the two to understand.
This process is denoted to as laissez-faire economics. With a
laissez-faire method, there are no trade boundaries. The key dint
is that worldwide supply and demand features will guarantee
that manufacturing runs smoothly. As a consequence, there is no
requirement to take any steps to defend or encourage trade and
prosperity because free markets will require control of everything.
Protectionism holds that global trade restriction is required
to ensure that markets function properly. As per assumptions
of the model, market imperfections may suffocate the relevance
of world commerce, and they target to dominate the economy
appropriately. Tariff barriers support, and restrictions have been
the most frequent types of protectionism. These methods are
established to solve any global economic imbalances .
International firms can help a country way to generate and
purchase commodities by allowing for specialization and, as a
result, more efficient resource usage. Global trade inconsistency,
according to opponents of trade liberalization, remains, placing
emerging economies in danger. One thing is for sure: the world
economy is always evolving. As a consequence, its participants
must develop as well .
Foreign trade expands the marketplace for a country’s
products. Exports have the potential to boost productivity growth and serve as an economic driver. The development of a nation’s overseas trade could resurrect a stagnant economy and bring it
down the route to stability and prosperity.
As a consequence of economies of scale, the increased
international need may lead to large manufacturing and a cheaper
cost structure. Economic growth may contribute to enhanced
utilization of designed levels and, as a consequence, cheaper costs,
resulting in more and more economic growth. Increasing exports
could lead to more job opportunities. Higher export possibilities
may also suggest fundamental investment in the country, which
will aid in its economic growth.
Some of the key ways that international trade contributes to
economic growth are as follows:
i. The primary purpose of international trade is to
identify methods of getting capital equipment imports, which are
necessary for the design process to take place.
ii. Trade allows knowledge to move more smoothly, leading
to increased productivity and a short-term value-added.
iii. Foreign trade creates compression for dramatic alteration
through (a) competitive import pressure, (b) competitive export
market density, and (c) better resource allocation.
iv. Exports allow for greater capacity utilization, leading
to economies of scale, as well as the separation of production
patterns from domestic demand and increased experience with
the use of new technologies .
v. Most employees’ well-being increases as a result of
international commerce. It does so in at least four distinct: (a)
enhanced export markets translate into better incomes; (b) even
though staff members are also clients, commerce offers them with
obvious rewards through imported goods; (c) commerce enables
staff to be more effective as the price of the items they generate
increases; and (d) commerce rises transfer of technology from
manufacturing to developing nations, resulting in a demand for
even more qualified workers in receiving countries.
vi. Increasing trade liberalization has been connected to
alleviating poverty in most emerging countries. As philosopher
Arnold Toynbee phrased it, “civilization has developed through
mimesis,” or copying or simple imitation.
In brief, trade encourages more efficient use of various areas’
resource endowments and enables customers to obtain goods
from trustworthy sources, hence boosting economic wellbeing.
What is the reason for the lack of open trade between nations?
Why are some people disadvantaged at the cost of everyone
else when there is free trade? There are several reasons for this,
the most prominent of which is “rent-seeking,” as defined by
economists. Rent-seeking happens when a group of people band
together and lobby the government to safeguard their interests.
Suppose that American shoemakers comprehend and
sympathize with the notion of free commerce, but that they also
perceive that inexpensive foreign shoes will undermine their
narrow benefits. Even if switching from shoe manufacturing to
computer manufacturing would boost productivity growth, no
one else in the shoe industry needs to waste their career or even
see their wages diminish in the short term .
This ambition may lead to shoemakers lobbying for special
tax concessions or more responsibilities on foreign footwear.
Arguments abound for protecting American jobs and preserving a
time-honored American craft; yet, these protectionism regulations
would render American labor worse efficient and American
consumers impoverished in the long run.
Modernization and trade create new opportunities, but they
often bring with them new obstacles. For a variety of reasons,
developing markets may find it challenging to remain competitive
on a global basis.
i. Ineffective or unproductive transportation, logistic
support, or border control systems;
ii. A lack of connectivity in telecommunication services,
currency sector, and information systems;
iii. Difficult-to-navigate supervisory surroundings that
quash new investment;
iv. Significant market gamers or cartels interact in
monopolistic practices that drive creativity, efficiency, or
The increasing sophistication of business has far-reaching
consequences for the world’s deprived, who are routinely
blocked it off international, national, and sometimes even
regional farmers’ markets in large numbers. Poverty is typically
entrenched in locations where accessibility to strong economic
hubs is constrained. Local businesses and localities lose out on the
opportunity to produce knowledgeable, competitive personnel
since they aren’t linked to global supply chains and can’t
change their items and talents as quickly . Increased trade
has implications for dispersion as well. While more economic
advantages nations in the long run by increasing competitiveness
and producing a lot of good opportunities in the export sector,
salaries in import-competing enterprises may decline or some
people may quit their livelihood.
Trade policy is one of the numerous economic instruments
utilized in emerging countries to meet the needs of economic
growth. The goals of a country’s trade strategy have traditionally been to increase exports while limiting the amount of foreign exchange available to the government.
The scientific data aids emerging economies in making
sound policy choices on business and finance, as well as climaterelated
concerns, which are important for sustainable growth and
poverty alleviation. An international effort to reduce trade costs
and help countries become more linked to the world economy.
This achievement allows the nations to keep aiding other nations
in formulating and executing meaningful reform initiatives
alleviating poverty and promoting economic stability .
The goal of a country’s trade strategy is to maximize
advantages from international trade by encouraging efficient and
competitive domestic production activities in the context of a
global multilateral trading system.
At the cross-country level, there is a correlation between
increased international commerce and economic growth. Some
of the most often referenced research in this field employ longrun
macroeconomic data to demonstrate evidence of a causal
relationship: trade has been one of the factors driving economic
expansion. Utilizing fundamental economic evidence, numerous
significant papers in this field have looked at the causal interaction
of different trade liberalization policies on business reputation
within countries. These studies also suggest that greater corporate
productivity has resulted from trade liberalization.
The world economy has experienced consistent positive
growth for the past half-century, which has now been
complemented by the even quicker international trade growth.
When we look into great nation data over the last half-century, we
could see that there was a correlation between economic growth
and international trade: nations with greater GDP growth both
have increased rates of trade growth as a percentage of output.
The graph below depicts this basic relationship, which plots the
predicted yearly variation in real GDP per capita vs trade growth
(average annual change in the value of exports as a percentage
of GDP). Contest (businesses that perform poorly to innovation
and lower charges were more likely to fail and just be supplanted
with the assistance of much more businesses and institutions);
Learning and innovation (companies that exchange advantage
extra enjoys and publicity to increase and undertake technology
and enterprise requirements from overseas competitors), and
Economies of scale (companies that really can export towards
the arena face high demand, and under the proper circumstances,
they can perform at large scales where the fee per unit of product
is low  (Figure 1).
The relationship between international trade and economic
growth has long captivated economists around the world, both
conceptually and empirically. We’ve looked at three possibilities
concerning international trade and economic performance below
based on this approach. The monetarist trade theory argued that
the only way for a state or nation to become wealthy and powerful
is to limit service and product imports whilst promoting more
export. The monetarists thought that by expanding exports whilst
restricting imports, administrations would be able to achieve a
beneficial trade balance, resulting in greater national affluence
and, therefore, economic growth.
Despite growing theoretical proof of favorable links between
change and growth in very many affluent countries, such
associations have yet to be demonstrated in developing countries,
especially in the developing world. Edwards  provides a
complete summary of the important problems surrounding the
link between transformation and economic growth, especially
the continuing problems to obtain reliable markers of change
the policy and precisely deciding the streams through which improved conditions allow growth, in their attempts to build such relationships. Additionally, according to the African Development
Report , transformation is a potent tool for sharing the benefits
of globalization both within the as well as between nations.
Moreover, the relationship between growth and advancement is
much more than a cause-and-effect relationship since economies
alter and become more accessible as they develop .
Eliminating currency borders may also aid in the expansion
of finance possibilities. Increased financing will lead to the
development of emerging innovations, which will help the
economic growth of the country. Expanding buyers and sellers
possibilities, and therefore a business environment that appeals to
multinational firms may help support such ventures. Nonetheless,
the advantages of change are influenced by the manufacture,
countryside, and qualities of the items that a nation creates and
trades; the internal monetary laws that are enforced; and the
bought and sold regime that is adopted. The comparative gain
concept and the consequences of the transformation result in
static and dynamic gains from transformation [17,18] (Figure 2).
According to Chen , Romer, Lucas, and Svensson claimed
that period excess, as well as an outside stimulus, can cause an
economic boom. To emphasize the position of technological
innovation and information development, Grossman & Helpman
 used endogenous boom forms of exchange. The model
provides an endogenous long-run boom fee that links trade and
boom by spreading era and expertise. According to the Rodriguez
& Rodrik  claim that trade is linked to finance and the
following boom. Taylor  proposed a simplified structuralist
interpretation of currency coverage with financial boom, known
as the gaps version, that explains why developing countries are
growing at quite a negative rate. Jayme , who investigated
data use in Brazil from 1955 to 1988, found that there was no
clear link between exchange and growth. Nonetheless, Frankel &
Romer  found that productivity for every capita increased by
between 2 percentage points and 3percentage points for every
percent increase in the exchange to Gross Domestic Product (GDP)
proportion in the Asia and Pacific Economic Cooperation (APEC)
countries, verifying the interrelationship between exchange
and economic expansion. In a parallel analysis, Levine & Zervos
 discovered a strong chain link between trade and growth
for Central and Southern African countries. They have a look at
discovered a high-quality sturdy correlation between financial
boom and the proportion of funding in GDP.
Their research also demonstrates a important and positive
relationship amongst the financing percentage and the change-to-
GDP ratio. Ndulu & Njuguna  suggested a booming paradigm
in which the structure factor was Gross domestic product and
the independent variables were change and move coverage
factors. Their findings revealed that change is linked to economic
development, while macroeconomic factors like the actual trade
rate, which affect exports and imports in a loop, have a important
impact on financial growth. They also originate that financing
has a direct influence on economic growth, but also that policy
changes can hinder funding. Their research also demonstrated
that, as little more than a result of change liberalization, transition
openness is crucial in perceiving the incredible. According to
Asam et al., (2002), the ratios of exports and output influence the
boom’s size and power. Because exports are a crucial stream of
income and a development engine, a robust export force fosters a
tremendous multiplier effect within the financial system, with farreaching
consequences. Ajmi AN et al.  used linear and nonlinear
tests to find a cointegrating association between exporters
and economic boom in South Africa, along with unidirectional
causality from Gross domestic product to exports. They concluded
that expanding employment and incomes inside the export zone,
as well as technical innovation, can help enhance Economic
Imports are intrinsically related to economic growth,
despite opposing implications on the supply side. Imports cause
leakage on the demand side and stifle monetary development;
nevertheless, import constraints can be alleviated by combining
alternative liberalization with supply-side performance profits.
The empirical data on the connection between imports and the financial boom, according to Mishra (2012), is mostly inconclusive. If rising GDP is frequently used to finance imports, growth would
be stifled and monetary expansion will be harmed. Import growth
also leads the domestic market for import substitution to decline,
lowering funding and, in the long run, efficiency (Lim and others).
Alternative openness is also another interesting matter in this
study. Yanikkaya  found that alternate openness or boom
may have had a large and extensive relationship. As an economic
growth frees up (imports and exports as a small fraction of
GDP) and participates more than that in global commerce, it will
become a member of the international market and can reap the
dynamic and static expansion of economic trade. The far more
basic degree of integration, as according Yanikkaya , is the
simple alternative ratios, which seem to be exports and imports
divided by GDP, and research has suggested a huge and strong
association with development. For example, Gries & Redlin 
the usage of the alternate degree, imports and exports as a ratio
of GDP as an openness degree, discovered a large courting among
GDP boom and openness. The equal size is likewise the only castoff
to degree alternate openness withinside the Penn World Tables
 (Figure 3).
The income effect, the impact of the accumulation of capital, its
consumer surplus, the wealth inequality impact, and the influence
of the weighted elements are the five (5) important aspects of
foreign trade that may affect economic growth, per the Corden
Report (1985). These impacts are cumulative, which means that
as the economy expands, the effect of trade openness on economic
growth increases stronger. According to Chen, using global trade
and other characteristics for explanatory variables to investigate
the statistical relationship between the two variables could not
only properly explain the relationship, but also reveal the degree
to which independent variables affect dependent variables (2009).
The study’s purpose was to discover if there was a
cointegrating correlation between Economic growth, which is also
an endogenous quantity, and exogenous trade variable quantity
and macroeconomic variables. The data demonstrated that
cointegrating existed, viewing a long-term link between GDP and
its regressors. The studies also revealed that to encourage trade
and, eventually, economic expansion, a stable macroeconomic
environment is essential. In a somewhat more economic
cooperation environment, where the corporation may take
advantage of foreign business and investment opportunities, the
effect of trade-enhancing legislation is more effective. This shows
that trade strategies aimed at reinstating global attractiveness and
diversifying exports have the possible to produce and maintain
profitable development for different economies throughout the
long term .
Income activity, capital stock, labor, and trade liberalization all
have a long-term relationship, according to the research. It was
found that investment and trade liberalization boosted growth in
the economy in together the short and long term. We also found
that trade liberalization and investment development have a
positive and significant relationship in stimulating economic
The consequences refuted our initial prediction that commerce
will have a favorable connection with the log of GDP per capita,
which was a good indicator of economic growth. We observed that,
while commerce affects productivity, it may ultimately serve as an
indicator of the already globalized nations after controlling for
external factors that affect growth in the economy. We approached
the problem after assessing the joint importance of environment
and investment using high multicollinearity. In the recurring
multiple linear regression models, the significant impact of savings
on growth in the economy was consistent. The final model showed
that the more money put into developing a domestic industry, the
quicker the economy is booming .
Economic expansion is shaped by a myriad of variables, and for
our study, we only considered the factors we consider important.
To properly demonstrate the scope and impact of economic and
commercial liberalization on productivity expansion, the model’s
scope must be narrowed. Analyzing the nation’s economy and
structure of the economy involves numerous variables, and
restricting the field, whether by industry or in some other way,
may show a more significant and nuanced connection between
trade and investment .
However, a heavy reliance on foreign commerce could
jeopardize fiscal stability and economic growth in terms of trade.
The nation’s outward-oriented strategy should switch away from
raw resources and semi-manufactured commodities and more
towards high-value-added products to have a far higher effect
on economic development. Furthermore, trade policy should
promote capital-intensive businesses and the accumulation of
human resources able to absorb advanced-country innovations
Export has the potential to create jobs, boost productivity,
transfer the level of technology, boost exports, and help developing
nations achieve long-term economic growth. Even more, than
before, nations at all development stages are looking for ways
to use international commerce to help them develop. (UNCTAD).
It has recently been recognized that global trade does not only
result in cash inflow but also that international firms in the host
nation can also assist local businesses. These advantages can take
many forms, including improved advertising, administration, and
production procedures. The role of technological advancement in
economic growth has been emphasized in recent growth literature.
The rate of development of emerging economies can sometimes
be measured by their ability to adapt and use technology.
The purpose of the study was to examine if there was a
cointegrating correlation between Economic growth and is an
endogenous variable, and exogenous variables such as trading
variables and macroeconomic factors. The data found a link, demonstrating a long-term association between GDP as well as its regression coefficient. The studies also revealed that to encourage
trade and, ultimately, economic growth and an economically stable
environment is essential. In a more open trade atmosphere, where
enterprises may take advantage of trade and financial possibilities,
trade-enhancing measures have a greater impact. This shows that
trade policies designed to restore global competitiveness in a plan
to enlarge and diversified exports can help emerging economies
boost and accelerate growth.
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