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Trade openness, labour market rigidity and economic growth: A dynamic panel data analysis

Published online by Cambridge University Press:  01 January 2023

Burçak Polat  and
Antonio Rodríguez Andrés
Burçak Polat
Affiliation:
Antalya Science University, Turkey
Antonio Rodríguez Andrés*
Affiliation:
VŠB – Technical University of Ostrava, Czech Republic
*
Burçak Polat, Antalya Science University, Çıplaklı Mah. Akdeniz Bulvarı. No: 290 Döşemealtı, Antalya, Turkey. Email: burcakpolat@hotmail.com
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Abstract

The rapid liberalisation of trade policies since the 1990s has brought additional attention to the role of trade as an engine of economic growth. Although an abundant literature addresses the relationship between openness and economic growth, the real effect of trade liberalisation is still ambiguous and undetermined. Most previous studies have ignored the selection effects of strict labour regulations on international trade. The main objective of this study is to measure the role of labour regulations in moderating the contribution of trade to economic growth among 30 Organisation for Economic Co-operation and Development countries for the period 2006–2013. In doing so, we employ a one-step Generalised Method of Moments system estimation method. Our results reveal that openness to trade does not have a robust and significant effect on growth. However, the interaction of openness with strict labour regulations enhances the contributions of trade to growth.

Keywords

F10F16J80Dynamic panel datagrowthinternational tradelabour standardsopenness
Type
Articles
Information
The Economic and Labour Relations Review , Volume 28 , Issue 4: Financialisation, construction work and inequality , December 2017 , pp. 555 - 564
Copyright
Copyright © The Author(s) 2017

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