Abstract
This research examines the macro factors affecting trade openness (TOP) in GCC economies from 1995 to 2020 using advanced panel regression methods like Fully Modified Ordinary Least Squares (FMOLS), Pedroni cointegration, and Granger causality. The study investigates the relationships between TOP and six key variables: gross national savings (GNS), net FDI flow, total investment (TIN), trade reserves (TR), trade balance (TB), and per capita income (PCI). Findings reveal that TOP is unidirectionally influenced by TIN, TB, PCI, and GNS, while TOP Granger causes FDI. PCI and FDI are the most significant determinants, whereas trade reserves are less impactful. The study underscores the importance of trade policy in promoting openness; suggests that policies encouraging FDI, export promotion, and reduced trade barriers can enhance trade openness and improve the trade balance. Infrastructure investments are also crucial for boosting trade capacity and competitiveness, offering valuable guidance for policymakers in the GCC and beyond.
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Article Details
- Year: 2025
- Volume: 46
- Issue: 3
- Pages: 239 - 264
- Accepted: 30.08.2025
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DOI:
https://doi.org/10.5281/zenodo.17416343 -
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How to Cite?
Md. Sazib Miyan (2025). Exploring the Drivers of Trade Openness in GCC Economies: New Insights from Theory-Driven Approach. Journal of Economic Cooperation and Development, 46(3), 239-264. https://doi.org/10.5281/zenodo.17416343
