The Effects of Openness and Indigeneity on Growth : Evidence from Nonparametric Panel Data Model with Two-Way Random Effect

This paper contributes to the globalization debate by studying the overall effect on growth of openness and indigenous factors. The empirical results show that the openness factors averagely promote growth whereas the indigeneity factors have a negative effect on growth. The conclusion is robust in parametric and nonparametric models. Industrialized economies score relatively high in terms of performance in both factors, but there is a high threshold beyond which the effects of these factors on growth are slower. Among the developing economies, openness is a necessary and prerequisite condition for growth, but the achievement of a high level of indigeneity is more important for sustainable growth