Openness and Economic Growth in Developing Countries

Kiel Working Paper No. 749

33 Pages Posted: 5 Dec 1996

Date Written: June 1996


Openness appears to have a strong impact on economic growth especially in DCs, which typically exhibit a high share of physical capital in factor income and a low share of labor. In the neoclassical growth model with partial capital mobility, physical capital's share in factor income determines the difference in the predicted convergence rates for open and closed economies. With a 60 percent share as in developing countries, the convergence rates should differ by a factor of about 2.5. My regression results for a sample of open and closed DCs roughly confirm this hypothesis.

JEL Classification: O41

Suggested Citation

Gundlach, Erich, Openness and Economic Growth in Developing Countries (June 1996). Kiel Working Paper No. 749, Available at SSRN: or

Erich Gundlach (Contact Author)

University of Hamburg ( email )

Department of Economics
Von-Melle-Park 5
Hamburg, 20146
+49 40 428384589 (Phone)


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