Impact Of Trade On Quality Of Economic Growth In Developing Countries

The discussion on trade-growth interconnection is not simple.Trade improves economic growth and prosperity in the long run.This study analyzed the impact of trade on economic growth quality of developing countries.The main target countries are Africa,Latin America and Asia-Pacific with use of panel data from(1990-2009).This study research the quality of economic growth measured from three indicators:efficiency,stability and sustainability of growth.This study calculated growth quality index by the method of Principal Component Analysis(PCA)using three indicators quality index.Then examined the impact of trade on economic growth quality of developing countries with the effects of government.The empirical results of dynamic regression showed that trade does not directly affect the economic growth quality but it effects positively and significantly with the intervention of government in full samples.So,the government role is important to boost the effects of Trade on economic growth quality.The results of quality indicators efficiency,stability and sustainability also showed the positive and significant role of trade with the government in all three main target countries.