The impact of International Trade on GDP: Evidence from Belarus

International Journal of Economics and Management Studies
© 2020 by SSRG - IJEMS Journal
Volume 7 Issue 3
Year of Publication : 2020
Authors : Tatsiana Dziavochka, Mathious Willie, Elyas Abdulahi Mohamued
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How to Cite?

Tatsiana Dziavochka, Mathious Willie, Elyas Abdulahi Mohamued, "The impact of International Trade on GDP: Evidence from Belarus," SSRG International Journal of Economics and Management Studies, vol. 7,  no. 3, pp. 135-142, 2020. Crossref, https://doi.org/10.14445/23939125/IJEMS-V7I3P119

Abstract:

This paper studies the Impact of International Trade on GDP. By using the simple linear regression technique, we examine three equations. Firstly, we established the relationship between GDP and its contributors. It was concluded that International Trade, more specifically Exports, has a positive impact on GDP. The results showed that a 1% increase in Exports would increase by 0.43%. Similarly, a 1% increase in Imports will decrease GDP by 0.43%. Subsequent to that, we use the SITC data to investigate the impact of the different types of Imports and Exports on GDP. The second equation focuses on the relationship between Exports and GDP. The significant variables in this regression are Chemicals and Related Products Exports, Commodities & Transactions Exports, Food, and Live Animals Exports and Manufactured Goods Exports. The results show that a 1% increase in chemical exports will increase GDP by 0.166%. On the other hand, a 1% increase in Commodities & Transactions Exports, Food, and Live Animals Exports, and Manufactured Goods Exports will decrease GDP by 0.09%, 0.27%, and 0.55%, respectively. The third equation focuses on the relationship between Imports and GDP. The results show that Imports have no impact on GDP since all of the variables are insignificant. The paper also places the regression results into context by using the RCA (Revealed Comparative Advantage Index). Overall, Chemical Exports have the highest Trade surplus of the significant variables and have shown consistent Comparative Advantage.

Keywords:

International Trade, SITC Data, GDP, RCA

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