SOUTH-SOUTH TRADE AND NORTH-SOUTH TRADE FOR GROWTH AND PRODUCTIVITY: A CROSS-COUNTRY ANALYSIS FOR THE CIS COUNTRIES

Abstract

This paper examines the impact of trade with various country groupings on both output and total factor productivity growth of Commonwealth of Independent States countries using the trade measures from the Eora multi-region input-output database for 1990-2013 period. Since the growth and productivity effects of various trade measures vary by several country groupings, this study evaluates the model for the developed countries (North), the developing countries (South), the Commonwealth of Independent States countries (South), the Organization of Islamic Countries (South) and the European Union countries (North) sequentially. Regarding the potential of the Commonwealth of Independent States countries for sustainable competition regionally and globally, this analysis is a worthwhile endeavor to guide the policy makers for future trade collaborations. Moreover, since the Commonwealth of Independent States countries are among the South countries, this study mainly enables the comparison of North-South trade with South-South trade and their effects on output and total factor productivity growth. The most significant result of this analysis is that the Commonwealth of Independent States countries gain more from trade with the South countries in terms of positive output and total factor productivity growth. While the exports of Commonwealth of Independent States countries to all country groups have a positive effect, imports from the North countries for the Commonwealth of Independent States have a negative effect on both income and total factor productivity. Estimates of the effects of trade on growth (both exports and imports) are supported by estimates of the effects on total factor productivity, regardless of the econometric forecast method.