Evaluation relationship between openness and total factor productivity (TEP) in select developing countries

AZIZALLAH FARHADI, PRESIDENCY OFFICE, IRAN
ALIREZA BASTANI, COMMERCIAL MINISTRY, IRAN
AHAMD SALAHMANESH, COMMERCIAL OFFICE, IRAN
Today's globalization has different dimensions such as economy. In general classification, one of the most important tools of globalization is expansion and growth of international trade. Obviously, any increase in volume of trade may cause considerable improvements in integration of countries therefore; economic merge and globalization would be easier. This paper asks the Principal question: in the meantime what is the relationship between trade and economic growth (through increasing productivity)? This paper tries to evaluate trade-developing effect on total factor productivity (TFP) in two group countries (oil exporter and Asian south east countries). For this reason, we will focus on openness and TFP relationship and evaluate them by the econometric methods using panel data on 9 countries spanning the 1960 -1990 period. The results show a significant impact of openness on productivity. We also find the human capital content of trade has a greater impact on TFP than openness in the Selected Oil Exporter Countries (Nigeria, I. R. Iran, Algeria, Venezuela) and also Openness has a greater impact on TFP than the R&D content of trade in the Selected South East Asia Countries (Thailand, Malaysia, Korea , Taiwan and Singapore)
Keywords: Productivity; Human Capital; Openness; Spillover Effect.