Published June 2, 2026 | Version v1
Journal article Open

BEYOND TRADE LIBERALIZATION: EXPORT DIVERSIFICATION AND GROWTH LIMITS IN RESOURCE-DEPENDENT TRANSITION ECONOMIES

Authors/Creators

  • 1. ROR icon Tashkent State University of Economics

Description

This study examines the relationship between trade openness, export diversification, and economic growth in Central Asia and the South Caucasus over the period 2010–2024. Using panel data for seven countries, the analysis applies fixed and random effects models to evaluate both direct and interaction effects of trade and economic structure on growth. The results show that trade openness does not have a statistically significant direct impact on economic growth. Export diversification, proxied by manufacturing value added, demonstrates only weak evidence of influence. The interaction between trade openness and diversification is positive, suggesting that the benefits of trade may increase in more diversified economies; however, this effect is not statistically significant. In addition, foreign direct investment and inflation do not exhibit significant effects on growth, reflecting structural limitations and macroeconomic challenges in the region.

Files

15-21.pdf

Files (237.7 kB)

Name Size Download all
md5:59ba81e8ce8a3d8aa7f5406fa51dcb97
237.7 kB Preview Download

Additional details

References

  • 1.Ahmadov, I. (2022). Industrial development and economic growth in transition economies. Economic Systems, 46(3), 100987. https://doi.org/10.1016/j.ecosys.2022.100987
  • 2.Apostolou, A., Gori, F., Kroen, T., Nechi, S., & Velkumar, S. (2025). Unlocking MENA and CCA trade in a fragmented world (IMF Working Paper No. 25/267). International Monetary Fund.
  • 3.Cadot, O., Carrère, C., & Strauss-Kahn, V. (2011). Export diversification: What's behind the hump? Review of Economics and Statistics, 93(2), 590–605. https://doi.org/10.1162/REST_a_00078
  • 4.Fernandes, N. (2020). Economic effects of coronavirus outbreak (COVID-19) on the world economy. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3557504
  • 5.Frankel, J. A., & Romer, D. (1999). Does trade cause growth? American Economic Review, 89(3), 379–399. https://doi.org/10.1257/aer.89.3.379