Openness and the Sacrifice Ratio Revisited

This paper investigates the relationship between trade openness and the sacrifice ratio for 126 countries from 1973 to 2007. The instrumental variable quantile regression method is used to explain heterogeneous impact of openness on sacrifice ratio, where openness is endogenous. Empirical results show that the relationship between trade openness and the sacrifice is heterogeneous and increases along with the levels of the sacrifice ratio. Also, there is a positive relationship during the periods of 1973-2007 and 1980-2007. For the period of 1990-2007, the relationship is negative when the sacrifice ratio is lower and is positive when the ratio is higher