Openness, Growth, and Development: Evidence from a Panel of East Asian Countries

This paper examines the interaction between openness, growth,and development using a panel of ten developing east asiancountries (china, japan, korea, malaysia, indonesia, thephilippines, singapore, hong kong, macao and vietnam) and fiveyearaverages for the period, 1975-2005. its primary objective is todetermine whether there is a direct link between the level ofdevelopment and openness, while controlling for the indirect effectof openness through its impact on economic growth. using a twoequationsimultaneous-equations model of development and growthand an alternative measure of openness, our findings suggest thatopenness has a positive influence on both economic growth andhuman development. we also find that while economic growthmakes a positive contribution to development, the converse is nottrue in that the more developed a nation the slower its growth rate.