The Effect of International Trade on Economic Growth

Andrii Oliinyk

Co-Presenters: Individual Presentation

College: College of Business and Public Management

Major: BS.FINANCE

Faculty Research Mentor: Chen Meng

Abstract:

With a focus on how trade openness helps long-term economic development,
this study looks at the relationship between global commerce and economic growth.
Countries can expand market access, improve production efficiency, and specialize
according to comparative advantage through international trade. This study explores the
connection between exports, imports, and GDP growth in both developed and
developing nations. The results suggest that countries with higher trade openness often
experience faster economic growth because of increased foreign direct investment,
productivity gains, and technology transfer. However, international trade does not affect
growth the same way in every country. Whether trade leads to positive growth outcomes
depends heavily on several factors, including infrastructure, human capital, institutional
quality, and overall economic stability. Economies that rely heavily on primary exports
can sometimes face instability and unequal income distribution. Overall, the study
concludes that while foreign trade can strongly support economic growth, additional
domestic policies are needed to ensure its benefits are sustainable and fairly shared
across society over time and across social and economic groups.