Vol. 9 No. 3 (2021): Business & Management Studies: An International Journal
Articles

The relationship between economic complexity and trade openness in emerging market economies

Ferhat İspiroğlu
Assist. Prof. Dr., Giresun University

Published 2021-09-24

Keywords

  • Ekonomik Karmaşıklık,
  • Ticari Dışa Açıklık,
  • Panel Nedensellik
  • Economic Complexity,
  • Trade Openness,
  • Panel Causality

How to Cite

İspiroğlu, F. (2021). The relationship between economic complexity and trade openness in emerging market economies. Business & Management Studies: An International Journal, 9(3), 1021-1031. https://doi.org/10.15295/bmij.v9i3.1869

Abstract

Economic complexity is a new concept that aims to provide a holistic measurement of the characteristics of the products produced on a country basis. This concept helps explain the income and development differences between countries and show the countries' production structures. On the other hand, trade openness is generally calculated as the ratio of total foreign trade volume to GDP and is used to measure the degree of freedom of foreign trade. In this context, both the concepts of economic complexity and trade openness are essential indicators that provide information about the global position of the country's economies. The study examined the relationship between economic complexity and trade openness on 16 emerging market economies for the period 1995-2017. As a result of the Dumitrescu and Hurlin panel causality test, no causality relationship was found from economic complexity to trade openness, while a causal relationship was found from trade openness to economic complexity.

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