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 oftrade with various country groupings on bothoutput and total factor productivity growth ofCommonwealth of Independent Statescountries using the trade measures from theEora multi-region input-output database for1990-2013 period. Since the growth and productivity effectsof various trade measures vary by several country groupings,this study evaluates the model for the developed countries(North), the developing countries (South), theCommonwealth of Independent States countries (South), theOrganization of Islamic Countries (South) and the EuropeanUnion countries (North) sequentially. Regarding thepotential of the Commonwealth of Independent Statescountries for sustainable competition regionally andglobally, this analysis is a worthwhile endeavor to guide thepolicy makers for future trade collaborations. Moreover,since the Commonwealth of Independent States countriesare among the South countries, this study mainly enables thecomparison of North-South trade with South-South tradeand their effects on output and total factor productivitygrowth. The most significant result of this analysis is that theCommonwealth of Independent States countries gain morefrom trade with the South countries in terms of positiveoutput and total factor productivity growth. While theexports of Commonwealth of Independent States countriesto all country groups have a positive effect, imports from theNordic countries for the Commonwealth of IndependentStates have a negative effect on both income and total factorproductivity. Estimates of the effects of trade on growth(both exports and imports) are supported by estimates of theeffects on total factor productivity, regardless of theeconometric forecast method.