How robust is the growth-openness connection? Historical evidence

Abstract

Previous literature has established a positive correlation between openness to international trade and GDP per capita growth for developed and developing economies in recent decades. However, looking at historical evidence from 1870 to the present, this paper finds no support for a positive growth-openness connection before 1970. In fact, the correlation is negative for the period 1920-1940. Cross-country growth regressions estimated for the period 1920-1990 suggest that the positive correlation between openness and growth is only a recent phenomenon. The paper provides useful conclusions regarding the robustness not only of the openness variables but also of other growth determinants.