Trade liberalisation and growth in developing countries

Trade liberalisation in developing countries over the last 20 years has oft en been implemented with the expectation of growth being stimulated; yet th e evidence on its growth enhancing effects is mixed. This paper argues that problems with mis-specification and the diversity of liberalisation indice s used are in part responsible for the inconclusiveness. Using a dynamic pa nel framework and three different indicators of liberalisation, the paper f inds that liberalisation does appear to impact upon growth, albeit with a l ag. The evidence points to a J curve type response and this finding is robu st to changes in specification, sample size and data period, (C) 2002 Elsev ier Science B.V. All rights reserved.