The Influence of Trade Openness the Economic Growth of Former Soviet Union Countries

10.22059/ier.2005.30938

Abstract

This paper tries to test the relationship between trade openness and economic growth in Former Soviet Union countries after their independence in 1991.
It has become an article of faith in most economic and political circles that opening up the economy to international trade will produce substantial benefits in terms of greater consumer choice and higher living standards. Higher productivity is expected to be realized through competitive pressure and through opportunity to specialize in production activities where countries have comparative advantage or they can gain from economies of scale.
The paper has investigated the trade regimes in Former Soviet Union countries after breaking apart and has used the statistical data to test the hypothesis that free trade through its special mechanisms positively affects the economic growth of these countries Because of the lack of sufficient statistical data the Panel data method is used to test the relationship in this cross-coumry analysis.