Determinants of the Relative Importance of Imports in the Economy: An Empirical Assessment

Abstract

This paper examines the impact of various determinants of the share of imports in the economy.  Based on data from the World Bank, we apply nonlinear regression to various samples of both developed and developing economies and find that empirical results differ depending on the level of economic development as well as the time period under consideration.  Following Esfahani and Dao we specify a statistical model of the share of imports in the GDP as being nonlinear dependent on the log of per capita Gross National Income (GNI), its square, the log of the size of the labor force, its square, the log of the surface area, and its square. We use a total of eleven samples with data for two different years: 2000 and 2014 [1,2]. Statistical results of such empirical examination will answer the question of how the effects of these independent variables vary across different country groups in the same year and also how these effects change over time for the same country classification.