The Impact of Trade Liberalization on Net Exports (Case Study of Selected countries)

Subject Areas : Applied Economics

عباس معمارنژاد ¹ (مسئول مکاتبات)
سمانه سادات عجایبی ² (ندارد)

Received: 2009-10-03 Accepted : 2011-01-07 Published : 2010-09-23

Keywords: Trade Liberalization, Net Export, Panel data,

Abstract :

Over the past two decades, trade has been an engine of growth and reduction of poverty. Trade liberalization is a dominant process for integration of developing countries into the world economy. Trade liberalization refers to the removal of government incentives and restrictions from trade between nations. This research studies the impact of trade liberalization on net exports of developing and newly industrialized economies. To accomplish this task, we collected a panel data set of 11 countries over 1999-2006. Our sample includes Iran, Chile, China, Brazil, Turkey, South Korea, Tunisia, Malaysia, Indonesia, India, and Mexico. To test the effects of Terms of Trade, real GDP, and the foreign income on net export, we use the pooled regression model as the baseline for our comparison. For the period of our study, we find strong evidence that trade liberalization leads to higher net exports and overall trade balance.