Issue

Vol. 2 No. 3 (2025): July

Copyright (c) 2025 Zubin Khaja Ahmadi; Yaqub Ali Rabin, Hamid Reza Qadamshahi

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

The Impact of Trade Openness on Economic Growth of South Asian Countries

https://doi.org/10.62810/jssh.v2i3.129
Zubin Khaja Ahmadi
Balkh University, Department of National Economy, Faculty of Economics, Balkh, Afghanistan
https://orcid.org/0009-0008-2552-6910
Yaqub Ali Rabin
Balkh University, Department of National Economy, Faculty of Economics, Balkh, Afghanistan
https://orcid.org/0000-0003-4001-3546
Hamid Reza Qadamshahi
Balkh University, Department of National Economy, Faculty of Economics, Balkh, Afghanistan
https://orcid.org/0009-0007-9653-9615

Corresponding Author(s) : Zubin Khaja Ahmadi

ahmadi.zubin@gmail.com

Journal of Social Sciences and Humanities, Vol. 2 No. 3 (2025): July

Abstract

This research analyzes how trade openness affects the economic growth of South Asian countries from 1980 to 2023. With annual panel data from eight South Asian countries, the study applies sophisticated econometric methods to analyze both short-term and long-term equilibrium relationships. Some of the key approaches include panel unit root tests (Levin-Lin-Chu, Im-Pesaran-Shin), Pedroni and Kao cointegration tests, Johansen Fisher cointegration approach, and Vector Error Correction Model. Trade openness is defined as the level of total trade (exports + imports) %of GDP, while economic growth is represented by GDP per capita. The analysis shows a positive long-run relationship between trade openness and economic growth within the region, confirming that open trade policies increase productivity and growth via specialization, technology transfer, and market expansion opportunities. VECM results suggest there’s unidirectional causality from trade openness towards economic growth in the long run which means liberal trade policies unconditionally boost economy. These conclusions are consistent regardless of different model specifications and control variables used. By emphasizing preserving open trade boundaries constructs strong evidence for policymakers on why they should sustain developed regions with extensive free-trade agreements. Through this research, policymakers appreciate the need for maintaining open trade regimes and developing complementary strategies like improving infrastructure, lowering trade barriers, and enhancing institutional capacity to fully harness the economic advantages of trade.

Keywords

Economic Growth Export Export GDP Import South Asian Countries Trade Openness
Khaja Ahmadi, Z., Rabin, Y. A., & Qadamshahi, H. R. (2025). The Impact of Trade Openness on Economic Growth of South Asian Countries. Journal of Social Sciences and Humanities, 2(3), 37–50. https://doi.org/10.62810/jssh.v2i3.129
Download Citation
Endnote/Zotero/Mendeley (RIS)
BibTeX
References
  1. Alam, K. J., & Sumon, K. K. (2020). Causal Relationship Between Trade Openness And Economic Growth: A Panel Data Analysis Of Asian Countries. International Journal of Economics and Financial Issues, 10(1), 118–126. https://doi.org/10.32479/ijefi.8657 DOI: https://doi.org/10.32479/ijefi.8657
  2. Bakari, S., & Mabrouki, M. (2017). Impact of exports and imports on economic growth: New evidence from Panama. In Journal of Smart Economic Erowth (Vol. 2, Issue 1, pp. 67–79).
  3. Basel J. A., A., Hafnida, H., & Mohammad Salem, O. (2021). “RELATIONSHIP AMONG EXPORT, IMPORT AND ECONOMIC GROWTH: USING CO-INTEGRATION ANALYSIS.” Psychology and Education Journal, 58(1), 5126–5134. https://doi.org/10.17762/pae.v58i1.2068 DOI: https://doi.org/10.17762/pae.v58i1.2068
  4. Blavasciunaite, D., Garsviene, L., & Matuzeviciute, K. (2020). Trade Balance Effects on Economic Growth: Evidence from European Union Countries. Economies, 8(3), 54. https://doi.org/10.3390/economies8030054 DOI: https://doi.org/10.3390/economies8030054
  5. Bunje, M. Y., Abendin, S., & Wang, Y. (2022). The Effects of Trade Openness on Economic Growth in Africa. In Open Journal of Business and Management (Vol. 10, Issue 02, pp. 614–642). https://doi.org/10.4236/ojbm.2022.102035 DOI: https://doi.org/10.4236/ojbm.2022.102035
  6. Farahmand, M. A., & Esen, E. (2020). the Relationship Between Trade and Economic Growth: the Case of Afghanistan* DişTi̇caretİleEkonomi̇k BüyümeArasindakİli̇şki̇:Afgani̇stanÖrneği̇. In The International Journal of Economic and Social Research (Vol. 16, pp. 81–98). http://dergipark.org.tr/esad
  7. Frankel, J. A., & Romer, D. (2017a). Does Trade Cause Growth? Global Trade, 1991, 255–275. https://doi.org/10.4324/9781315254166-11
  8. Frankel, J. A., & Romer, D. (2017b). Does Trade Cause Growth? In Global Trade (Issue September). https://doi.org/10.4324/9781315254166-11 DOI: https://doi.org/10.4324/9781315254166-11
  9. Hobbs, S., Paparas, D., & AboElsoud, M. E. (2021). Does foreign direct investment and trade promote economic growth? evidence from Albania. In Economies (Vol. 9, Issue 1). https://doi.org/10.3390/economies9010001 DOI: https://doi.org/10.3390/economies9010001
  10. Huchet-Bourdon, M., Le Mouël, C., & Vijil, M. (2018). The relationship between trade openness and economic growth: Some new insights on the openness measurement issue. World Economy, 41(1), 59–76. https://doi.org/10.1111/twec.12586 DOI: https://doi.org/10.1111/twec.12586
  11. Idris, J., Yusop, Z., & Habibullah, M. S. (2016). Trade openness and economic growth: A causality test in panel perspective. In International Journal of Business and Society (Vol. 17, Issue 2, pp. 281–290). https://doi.org/10.33736/ijbs.525.2016 DOI: https://doi.org/10.33736/ijbs.525.2016
  12. Keho, Y. (2017). The impact of trade openness on economic growth: The case of Cote d’Ivoire. In Cogent Economics and Finance (Vol. 5, Issue 1). https://doi.org/10.1080/23322039.2017.1332820 DOI: https://doi.org/10.1080/23322039.2017.1332820
  13. Leamer, E. E., & Levinsohn, J. (1995). International Trade Theory: The Evidence BT - Handbook of International Economics. In Handbook of International Economics (Vol. 3, Issue 26). http://www.nber.org/papers/w4940.pdf%5Cnpapers2://publication/uuid/A49075EC-B8DA-4EC1-A84E-74D54A585B58
  14. Mashael Eid Alotaibi, Mariah Ali Almohaimeed, & Wjdan Mohammed Alharbi. (2020). The Impact of International Trade on Economic Growth. Journal of Modern Accounting and Auditing, 16(11). https://doi.org/10.17265/1548-6583/2020.11.002 DOI: https://doi.org/10.17265/1548-6583/2020.11.002
  15. Merale Fetahi, V., Luljeta, S., & Mihail, P. (2014). Empirical Analysis of the Effects of Trade Openness on Economic Growth: An Evidence for South East European Countries. Procedia Economics and Finance 19. s/by-nc-nd/4.0/).%0ASelection and/or Peer-review will be under responsibility DOI: https://doi.org/10.1016/S2212-5671(15)00004-0
  16. Monyela, M. N., & Saba, C. S. (2024). Trade openness, economic growth and economic development nexus in South Africa: a pre- and post-BRICS analysis. Humanities and Social Sciences Communications, 11(1), 1108. https://doi.org/10.1057/s41599-024-03604-2 DOI: https://doi.org/10.1057/s41599-024-03604-2
  17. Nguyen, M. L. T., & Bui, T. N. (2021). Trade openness and economic growth: A study on asean-6. In Economies (Vol. 9, Issue 3). https://doi.org/10.3390/economies9030113 DOI: https://doi.org/10.3390/economies9030113
  18. Panagariya, A. (2003). Miracles & Debacles: In Defense of Trade Openness. In Work (Issue April 2002). https://www.columbia.edu/~ap2231/miracles and debacles-March-04.pdf
  19. Pilinkienė, V. (2016). Trade openness, economic growth and competitiveness. The case of the Central and Eastern European Countries. In Engineering Economics (Vol. 27, Issue 2, pp. 185–194). https://doi.org/10.5755/j01.ee.27.2.14013 DOI: https://doi.org/10.5755/j01.ee.27.2.14013
  20. Purnama, P. D., & Yao, M. H. (2019). The Relationship between International Trade and Economic Growth. International Journal of Applied Business Research, 1(02), 112–123. https://doi.org/10.35313/ijabr.v1i02.72 DOI: https://doi.org/10.35313/ijabr.v1i02.72
  21. Raghutla, C. (2020). The effect of trade openness on economic growth: Some empirical evidence from emerging market economies. Journal of Public Affairs, 20(3). https://doi.org/10.1002/pa.2081 DOI: https://doi.org/10.1002/pa.2081
  22. Ramos, F. F. R. (2001). Exports, imports, and economic growth in Portugal: Evidence from causality and cointegration analysis. In Economic Modelling (Vol. 18, Issue 4, pp. 613–623). https://doi.org/10.1016/S0264-9993(00)00055-9 DOI: https://doi.org/10.1016/S0264-9993(00)00055-9
  23. Rodriguez, D., & Rodrik, F. (2001). Trade policy and economic growth: a keptic’s guide to the cross-natioanal evidence. In World (Vol. 15, Issue January). http://www.nber.org/chapters/c11058 DOI: https://doi.org/10.2307/3585399
  24. Sachs, J. D., Warner, A., Aslund, A., & Fischer, S. (1995). Economic Reform and the Process of Global Integration. Brookings Papers on Economic Activity, 1995(1), 1. https://doi.org/10.2307/2534573 DOI: https://doi.org/10.2307/2534573
  25. Sakyi, D., Villaverde, J., & Maza, A. (2015). Trade openness, income levels, and economic growth: The case of developing countries, 1970–2009. In Journal of International Trade and Economic Development (Vol. 24, Issue 6, pp. 860–882). https://doi.org/10.1080/09638199.2014.971422 DOI: https://doi.org/10.1080/09638199.2014.971422
  26. UN Trade and Development (UNCTAD). (2025). UNCTAD Data Hub. https://doi.org/https://unctadstat.unctad.org/datacentre/dataviewer/US.GDPTotal
  27. Zahonogo, P. (2017). Trade and economic growth in developing countries: Evidence from sub-Saharan Africa. Journal of African Trade, 3(1–2), 41. https://doi.org/10.1016/j.joat.2017.02.001 DOI: https://doi.org/10.1016/j.joat.2017.02.001
Read More
Author biographies is not available.
Received 2025-07-04
Accepted 2025-07-26
Published 2025-07-31
Download
PDF
Statistic
Read Counter : 123 Download : 70