Trade Promotion and the Impact on Economic Growth: An Evidence form A Panel Dataset

Abstract

Marketing in general and trade promotion strategy, particularly, have to play an important role in promoting development of countries, especially of developing countries that seek to make exports as an engine for economic growth. This paper reviews the roles of marketing by investigating the impacts of trade promotion on development which is proxied by the growth rate of GDP. The authors test the hypothesis that the more spending of government on trade promotion activities leads to higher rate of economic growth. The study is applied for a sample of 30 countries including 15 developed and 15 developing countries in the period of 1970-2015. The results of a fixed effect regression model show that an increase in government expenditure of trade promotion leads to higher rate of economic growth in whole sample. Government expenditure of trade promotion also plays an important role on international trade. The estimation results also suggest that countries with higher levels of government expenditure on trade promotion activities will have higher degrees of its trade openness.