The Importance of Trading Partner's Economic Growth on Economic Growth: the Case Study of OPEC Member Countries

Openness and its relation with economic growth is one of the controversial issues in economics. Recent years, various mechanisms of openness influencing on economic growth is considered. One of the mentioned mechanisms is the impact of openness on economic growth through economic growth in tradingpartners countries. By Using an unbalanced panel data analysis, this study evaluates the impact of trading partner's economic growth on economic growth of the member countries of the Organization of Petroleum Exporting Countries (OPEC) for the period of 1960- 2004. The results indicate that there is statistically positive and significant effect of trading partners’ economic growth, investment, human capital and opennesson economic growth in OPEC member countries and there is negative effect among initial GDP, inflation, government expenditure andeconomic growth in OPEC member countries. The results are robust and are not sensitive where other determinants of economic growth were added to the model. This is also true in different samples.