The nexus between trade openness, institutions and economic growth: the case of Central and Eastern European Countries (CEECs)

Abstract

The role that the quality of institutions plays in economic growth has attracted a great deal of interest from economists over the past three decades.In addition, the literature argues that trade openness affects positively the economic growth of developed economies as well as those in transition by improving their national productivity. Trade openness stimulates competition, which in turn pushes national companies to innovate or imitate so that they can face international competition.

This study aims to analyze the relationship between institutional quality, trade openness and economic growth. To do this, we used a panel data for 10 Central and Eastern European Countries (CEECs) over the period 2002-2018. The results showed that the existence of good institutions and openness to international trade affect positively the economic growth.