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This paper reexamines recent claims in the literature that foreign trade economic openness plays no role in the Taiwanese economic growth once human capital is taken into account. We show that such a claim lacks weight and is primarily the outcome of model misspecification. In the context of properly specified models, results from cointegration, errorcorrection models, and variance decompositions all suggest that economic openness is a significant catalyst of growth in Taiwan over and above any growth contribution of human capital accumulation.
Studies in Economics and Finance – Emerald Publishing
Published: Jan 1, 2002
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