This paper re‐examines 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, error‐correction 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.
Darrat, A.F., Hsu, M.K. and Zhong, M. (2002), "Foreign Trade, Human Capital and Economic Growth in Taiwan: A Re‐examination", Studies in Economics and Finance, Vol. 20 No. 1, pp. 85-94. https://doi.org/10.1108/eb028761Download as .RIS
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