Trade Liberalization

Financial sector is one of the most influential sectors in economic activities. Empirical and theoretical studies conducted in recent years have also confirmed the significant role of financial institutions in economic growth. Additionally, trade and financial liberalization policies have been particular concerned with strategic policies in developed and developing countries. According to dynamic panel data (DPD) and by means of generalized method of moments (GMM) during 1990 to 2008, this study has investigated effects of trade and financial liberalization on financial development of MENA member countries. Empirical results imply that trade liberalization and financial liberalization have influenced separately financial development, while due to inefficiency of financial institutions in providing appropriately financial resources, conducting both liberalization simultaneously has had an unexpected negative effect on the financial development in the region. JEL classification: F19, G29

  This paper examines impact of trade liberalization on industrial growth of India. The research problem is expressed as €œTo what extent does trade liberalization or openness of the economy influence industrial growth of India?€ To identify the impacts of trade liberalization, total time period, 1970-2010, is divided into two sub periods of before trade liberalization i.e. (1970 to 1990) and after trade liberalization i.e. (1991 to 2010). The variables identified in the main objective of the study are tested hypothetically, and quantitative analytical methods are applied to make accurate and reliable conclusions. Graphical presentations and regression analyses are used to assess the degree of relationships among variables concerned. Further to test the structural changes in the country, the Chow test is applied. Findings of the study confirm that there is no evidence that the structural changes in industrial growth rates have been happened during the last four decades due to trade liberalization in India. JEL Classification: F14, F13, F14, L52

Trade liberalization has induced volatility in the prices of oilseeds. Oilseeds such as rapeseed and mustard, which are rich in vitamins, minerals, and the staple ingredients in many food items. This paper analyzed the international and domestic prices of rapeseed and mustard for India. The analysis showed that India was a net exporter of rapeseed and mustard oilseeds and has experienced lower price volatility for these crops. On the other hand, in terms of processed rapeseed and mustard oil, India has been a net importer. As such it is unable to influence the prices of these products and has greater price volatility in the domestic market. The present study examined these issues in-depth in post-trade liberalization and India’s accession into the World Trade Organization and commitments under the Agreement in Agriculture. The statistical technique used for analysis was the run test and the nominal protection coefficients. Therefore, the present study was carried out to analyze the fluctuations in international and domestic prices of rapeseed and mustard crops after trade liberalization and its impact on the competitiveness of a crop. JEL Classification: D40, F14,O53

Structural change plays an important role in developing any economy, so understanding it is critical to make policies that increase total factor productivity. The structural change that leads to an efficient resource allocation after trade reforms is desirable; the key factor that can affect the relation of "structural change and trade liberalization" with productivity is the quality of institutions. In this study, we first use the principal component method to propose a multidimensional index for structural change and then apply the ARDL econometrics model to evaluate the effect of trade liberalization and structural changes on total factor productivity in Iran during 1991- 2018. The results show that structural changes increase the total factor productivity, and trade liberalization has a positive and significant effect on total factor productivity in the short term. Our results also indicate that there is no long-run relationship in this period.

The present study aims to analyze the long-term impact of tariff reductions to be mandated in the event of accession of Iran to the World Trade Organization (WTO) on the industrial sector using the Recursive Dynamic Computable General Equilibrium (RDCGE) model. For this purpose, the model was calibrated for the 2011 social accounting matrix of Iran. In the baseline scenario, it was assumed that the Iranian economy will experience annual growth of 2% without accession to the WTO, which is the same rate as the population growth. In the alternative scenario, the tariff reduction simulation was performed based on the average tariff commitments of 22 developing countries acceded to the WTO. Based on the results, industrial production and exports will shrink by 3.4 and 3.5%, respectively, over the 30 years after joining the WTO, leading to an 81% gap between the production levels in the alternative and baseline scenarios at the end of this period. JEL Classification: I38, C68, F13.