This paper examines trade openness and economic growth. What has been the effect of openness to trade on economic growth in Kenya? Kenya’s trade policies have emerged since independence, it has improved from import substitution to progressive liberalization through emergence of export processing zones, reduction of tariffs levels, eliminated price controls and licensing requirements leading to modest growth in trade Republic of Kenya (2005). Although the country has improved in it’s trade policies, it is still counted as mostly unfree. Empirical evidence suggests that free trade leads to a better economic performance in different channels, however the evidence has been questioned because of the doubts on how trade openness of a country should be measured and methodology estimation. The study uses trade intensity as a measure of trade openness. Applying Ordinary least squares using a time series data obtained from the World Development Indicators a negative relationship is seen between trade openness measure and Gross domestic product in Kenya. A Granger causality test is done also to determine whether trade liberalization can be used to give significant information about the economic growth of Kenya or vice versa. Vector Auto regression model (VAR) is used to determine the Granger causality. In the OLS regression model measures of openness, labor and capital are significant.

Human capital is increasingly believed to play an indispensable role in the growth process; however, adequately measuring its stock remains controversial. Because the estimated impact that human capital has on economic growth is sensitive to the measure of human capital, accurate and consistent measures are desirable. While many measures have been developed, most rely on some proxy of educational experience and are thus plagued with limitations. In this study, I adopt a lifetime earnings approach to estimate the monetary value of the human capital stock for New Zealand. I find that the country's working human capital increased by half between 1981 and 2001, mainly due to rising employment level. This stock was well over double that of physical capital. I also model human capital as a latent variable using a Partial Least Squares approach. Exploratory analyses on a number of countries show that age, gender and education combined can capture 65-97 percent of the explained variation in human capital. JEL Classifications: J24, O47.

Natural disasters have potentially large economic impacts on developing nations. Thereis a small, but growing literature analyzing these impacts on variables such as gross domesticproduct. In this study Belize, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, andNicaragua are studied to measure the impact that disasters have had on economic growth overthe past twenty-nine years (1970-1998). The development indicator, gross domestic product(GDP) growth rate, will be measured over the twenty-nine year study period and analyzed withrespect to correlation with natural disasters. Regression analysis is used to investigate therelationship between natural disasters and economic growth.It is hypothesized that the number of natural disasters that a country faces has a negativeimpact on economic growth rate as measured by GDP. As the quantity of disasters experiencedin any given year increases the overall disruption of the economy is predicted to be greater, thusleading to lower levels of economic growth in the short term.

The effect of economic growth on environmental quality is much under dispute. A number of empirical studies have made the claim that there exists in some income ranges a positive relation between per capita income and some measure of environmental quality. According to this inverted U-shaped pattern of different pollutants relative to per capita incomes in different countries which is also called the "Environmental Kuznets Curve" (EKC), environmental pressure increases up to a point as income goes up; after the turning point environmental quality improves as income keeps rising. Possible explanations for this pattern are seen in the progression of economic development, from clean agrarian economies to polluting industrial economies to clean service economies. This trend is enhanced through the transfer of cleaner technology from high-income countries to low-income countries and the tendency of people with higher income having a higher preference for environmental quality. Since this relationship is so fundamental to questions of economic development and sustainability it has provoked a vast load of research over the last seven years supporting but also heavily criticizing the results and conclusions. This paper gives an overview of the literature published on this topic to date and the conceptual, methodological and fundamental critique put forward. (author's abstract) / Series: Working Papers Series "Growth and Employment in Europe: Sustainability and Competitiveness"

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Doctor of Philosophy / Since the 1950s, economic growth has been one of the main topics of economic discipline. In this context, the sources of economic growth have been analysed by different economic theories. These theories can be decomposed into two groups, namely modern neoclassical theory and evolutionary economic theory. In the modern neoclassical economic theory, the technological progress is considered as the main determinant of the long-run economic growth. In this regard, the sources of economic growth differences among countries are analyzed by using various types of models. In the earliest studies, it is assumed that technological progress is exogenous (Solow-Swan model). Constant returns to scale and perfectly competitive market structure assumptions are the main characteristics of these studies. After the developments in the economic theory, technological progress has been taken into account in a different way by a new line of models, namely endogenous growth models. More specifically, technological progress is endogenously determined process in these models. Contrary to the previous models, increasing returns to scale, which stem from externality and the monopolistic market structure, play a significant role in endogenous growth models. We have reached to the conclusion that, although it suffers from some weaknesses, endogenous growth model proposes a more realistic explanation for the economic growth process. In the evolutionary economic theory, technological progress is also considered as the main determinant of economic growth. However, this theory deals with empirical issues by focusing on observed facts instead of constructing theoretical models, and provides both guidance and interpretation regarding technological progress. In this theory, variables and relationships that are considered have many practical implications. In that respect, its structure is very much realistic and it avoids certain logical gaps and inconsistencies. One of the aims of this thesis is to examine developments in economic theory by focusing on technological progress. For this purpose, we compare formal and evolutionary theories. Our theoretical review reveals that both the endogenous growth models in the tradition of modern neoclassical theory, and the important insights of the evolutionary economic theory help to analyze technological progress and/or economic growth. Furthermore, this thesis aims to measure technological progress. The measurement of technological progress is vital for the nations’ development strategies and the firms’ innovation policies. In this regard, we use patent statistics as a proxy of technological progress. The empirical parts of the thesis involve a number of applications of endogenous growth theory by taking into account the propositions of modern neoclassical economic theory. In this regard, the growth rate differences across countries are examined by using the frameworks of both the modern neoclassical and evolutionary theories. The results show that both theories have reasonable power to explain why growth rate differs across countries. In addition, we conclude that patenting activities rather than R&D activities more suitably represent innovative activities. Moreover, this thesis empirically tests the knowledge generation process in the framework of endogenous growth approach. We employ the knowledge production approach for this purpose. It is found that both domestic and international stocks of knowledge as measured by granted patent statistics, R&D activities, human capital and openness measures are significant factors in explaining productivity growth. Furthermore, product variety and quality improvement dimensions of technological progress are empirically analyzed by using patent statistics. It is found that both dimensions of technological progress significantly affect creation of new technologies. Finally, the findings indicate that technological capability of Turkey is far away from other developed countries covered by this study.

Diss. Göteborg : Göteborgs universitet, 2006.

This dissertation investigates the casual relationship between trade openness and economic growth in a sample of 87 countries (developing & developed) during the period 1970-2013. According to the previous literature, the openness-growth relationship seems to be relatively unclear and inconclusive, although the general tendency is that openness has a positive impact on economic growth. Our empirical results confirm this ambiguous relationship and provide evidence which vary across model specification. Regarding of the per capita income regression for all countries, trade openness has a positive but not a robust impact on income, as the coefficient of openness is positive but at the same time insignificant. As far as growth regression is concerned, it seems that there is a positive relationship between openness and growth for all countries. More specific, for developing countries trade openness has a negative effect on income per capita and a positive one on income growth. On the other hand, a negative relationship between openness and income per capita and income growth presented in our results for developed countries.

The effect of income inequality has been controversial issue for decades, which researchers have concluded conflicting results. Many researchers have found that income inequality is conducive on economic growth, while others found harmful effect. Hence, this paper investigates the impact of income inequality on economic growth by using the cross sectional analysis. The averaged data from periods of 2002-2006 were used and observations from 90 developed and developing countries were also used. We find that income inequality is negatively associated in economic growth.

One research path has been to see whether the type of political regime, namely a democratic versus an authoritarian regime, influences economic growth. Much of the past literature has produced ambiguous results. But more recent studies using more sophisticated statistical techniques have often shown a positive effect of democratization upon economic growth. These studies have made welcome contributions. However, they often fail to examine how the effects of democratization could differ across countries or over time. In my dissertation, I will look more closely at how the effects of democratization could differ depending upon country characteristics - corruption and adherence to rule of law - or when democratization occurs. Chapter 1 investigates whether the association between corruption and economic growth differs between democracies and authoritarian regimes. Consider illegal corruption and legal lobbying, both forms of rent seeking, as imperfect substitutes. Suppose lobbying is easier to do in democracies. Then, lowering corruption in authoritarian regimes could have greater growth benefits because of the lower substitutability between corruption and lobbying in these countries. Using cross-country, annual data from 1984 to 2007, we regress economic growth on: the control of corruption, the degree of democracy, and an interaction term combining the two. We find that coefficients are positive on the first two variables. However, the coefficient on the interactive term is negative, suggesting that the benefits upon growth of controlling corruption are actually greater in authoritarian regimes. Chapter 2 examines both short and long-run effects of democratization upon economic growth and measures the extent they differ. For example, democratization could initially lower economic growth due to transitional costs. Effects could then turn positive as democratic reforms take hold and provide greater freedoms to the populace. But over time, greater amounts of rent seeking could occur and so diminish benefits of democratization. Or, do other patterns rise? Utilizing difference-in-difference estimations and controlling for time and country specific fixed effects, we analyze a panel data sample of 174 countries from 1960 to 2003. Our results show that democratizations are not associated with high transitional costs. Instead, we find that democratization enhances long-run growth more in Sub-Saharan Africa than in other regions. Finally, we find evidence that the effects of democratization upon growth differ between partial and full democratization episodes. Chapter 3 considers whether or not democratization improves institutions that have so often been argued to increase economic growth. Utilizing a panel dataset from 1984 to 2007 for 127 countries, we examine whether democratization promotes the rule of law. We generally find a positive influence from democratization upon the rule of law although effects are strongest for sub-Saharan Africa.