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Cumulative Trade and Economic Growth in the East Asian Countries

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Abstract

There have been many empirical researches to find out the role of trade on economic growth. However, no attempt has been made to unravel the role of cumulative trade on economic growth. It could be presumed that the beneficial effects of trade will accumulate to affect the operation of economies to the future. We used cumulative trade augmented time index in our cost function framework to test whether cumulative trade contributed to the economic growth of the East Asian countries. We found that cumulative trade enhanced technical progress and played an important role in the economic growth of the East Asian countries. Cumulative trade also contributed to the East Asian countries' catching up the superior technologies of developed countries.

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