How trade and foreign investment affect the growth of a small but not so open economy: Australia?
This article analyses the impact of trade and foreign investment on a small but not so open economy, Australia, whose growth rate outpaced the majority of the OECD countries in the last decade. We model five channels of outward orientation: exports, imports, foreign direct investment, foreign portfolio investment and other foreign investment. A cointegrated vector autoregressive model, complemented by a robust Granger noncausality test, is specified to identify permanent channels of outward orientation. Imports and direct investment are found to have a growth effect in the long run. The effect of imports is almost three times that of direct investment.
Year of publication: |
2009
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Authors: | Iyer, Krishna ; Rambaldi, Alicia ; Tang, Kam Ki |
Published in: |
Applied Economics. - Taylor & Francis Journals, ISSN 0003-6846. - Vol. 41.2009, 12, p. 1525-1532
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Publisher: |
Taylor & Francis Journals |
Saved in:
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