Abstract:

Purpose: The aim of this research is to analyze the effect of trade openness on economic growth for the Organization for Economic Cooperation and Development (OECD) countries between 1997-2020. Design/Methodology: In this study, the Cobb-Douglas production function was expanded by adding the trade openness variable following the relevant literature. In the study using panel data analysis method, Westerlund cointegration test was applied. Afterwards, Dumitrescu Hurlin Panel Causality Test was applied to determine the direction of causality relationship between variables. Findings: Westerlund cointegration test was applied and a cointegration relationship was found between the series. According to the causality test results, a bidirectional causality relationship was found between trade openness and economic growth. According to the results of the AMG estimator (Augmented Mean Group Estimator), it was concluded that trade openness positively affects economic growth throughout the panel. Limitations: The analysis started in 1997 in order to obtain the complete data for the variables used in OECD member countries. Originality/Value: The effect of trade openness on economic growth differs in each country in positive and negative terms. Therefore, it is important to determine how the effects of openness on growth have an impact on countries and country groups. It is expected that continuing to research this subject in the OECD sample will contribute to the field.

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