The influence of international trade on economic growth and distribution in developing countries

Tobias Bidlingmaier is currently working as an Investment Manager in the Special Programs Department at the Deutsche Investitions- und Entwicklungsgesellschaft (DEG) in Cologne, Germany. After graduating with a M. A. in Economics from the University of Bayreuth and the University of Nebraska-Lincoln, he continued his postgraduate education at the Ruhr-University Bochum where he earned his PhD in 2009. While completing his dissertation, he worked as a research and teaching assistant at the Institute of Development Research and Development Policy (IEE). The economies of developing countries today are highly integrated into world markets. Trade volumes in relation to the overall size of the economy are often much higher in developing countries than in industrial ones. The question that emerges from this trend is, „What impact does international trade have on economic growth and distribution in developing countries?“ In order to answer this question the present study derives empirical testable hypotheses from theoretical models thereby bridging the existing gap between theory and empirical studies. A broad range of trade variables derived from a growth model incorporating features from the new growth theories suggest “deeper” effects of trade on economic development that go beyond the standard „openness“ correlations. Likewise, the simulation of a trade reform on goods and factor prices shows insightful results on welfare changes for various Thai household categories. The distributional impacts do not correspond with the simple dichotomy of the rich getting richer and the poor becoming poorer.