Vol. 11 No. 2 (2023): Business & Management Studies: An International Journal
Articles

The causal relationship among trade openness, financial development, and economic growth: Recent evidence from newly industrialized countries (NICs)

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  • Burak Tuğberk Tosunoğlu
Burak Tuğberk Tosunoğlu
Assist. Prof. Dr., Anadolu University, FEAS, Eskisehir, Turkey
DOI: https://doi.org/10.15295/bmij.v11i2.2229

Published 2023-06-26

Keywords

  • Ekonomik Büyüme, Ticaret Açıklığı, Finansal Gelişme
  • Economic Growth, Trade Openness, Financial Development

How to Cite

Tosunoğlu, B. T. (2023). The causal relationship among trade openness, financial development, and economic growth: Recent evidence from newly industrialized countries (NICs). Business & Management Studies: An International Journal, 11(2), 532–540. https://doi.org/10.15295/bmij.v11i2.2229

Copyright (c) 2023 Burak Tuğberk Tosunoğlu

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Abstract

A country's financial development and trade openness are important indicators that affect integration into the economic system at the international level. Especially in newly industrializing countries, these variables can be beneficial in ensuring economic growth. Financial development supports economic development through the mobilization and effective use of capital. Trade openness is one of the unifying forces of productivity and economic growth. The effectiveness of trade openness is highly dependent on structural reforms. Newly industrialized countries are motivated to attract large amounts of capital and investment from the global economy. These countries tend to encourage exports while ensuring their industrialization. This research investigates the relationships between financial development, trade openness, and economic growth for ten newly industrializing countries. Research data contained the period from 1990 to 2020. The Dumitrescu-Hurlin panel causality test was used in the analysis. Considering the results, there is a uni-directional causality relationship between trade openness to economic growth and financial development to trade openness. Moreover, a bidirectional relationship between economic growth and financial development has been observed.

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