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Journal of Economic Integration 2019 March;34(1) :1-37.
DOI: https://doi.org/10.11130/jei.2019.34.1.001
Trade Policy Space, Economic Growth, and Transitional Convergence in terms of Economic Development

SENA KIMM GNANGNON 

World Trade Organization, Geneva, Switzerland
Corresponding Author: SENA KIMM GNANGNON ,Tel: +41 (0)22 739 51 11, Email: kgnangnon@yahoo.fr
Copyright ©2019 Journal of Economic Integration
ABSTRACT
The present study proposes a quantitative measure of the concept of trade policy space and investigates its impact on countries’ economic growth and transitional convergence in terms of economic development. In this study, trade policy space is considered as the room for maneuver available to a government once its current trade policy departs from the structural domestic and international factors that could influence the trade policy. The transitional convergence is defined as the catch up of a country’s real per capita income with the world’s average real per capita income. The empirical analysis covering 150 countries from 1995 to 2015 shows that although the trade policy space exerts a positive impact on economic growth, this positive effect depends on countries’ structural policies. Furthermore, the study results indicate that the trade policy space exerts a positive and significant effect on transitional convergence, and the greater the trade policy space, the higher is the transitional convergence.

JEL Classification
F13: Trade Policy; International Trade Organizations
F14: Empirical Studies of Trade
F63: Economic Development
O40: General
Keywords: Trade policy space | Economic growth | Transitional convergence
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