Effects of Services Sector Openness on Economic Growth in Selected OIC Countries

Because of widespread effects of services trade on macroeconomic indicators such as economic growth, investment, employment and creating new job opportunities, this sector has increased its dominance in the national and international economies. Therefore, in the recent decades, such importance has made most of developed and developing countries to do some structural adjustments in the service sector.This study aims to specify an econometric model and estimate the effects of services trade openness, defined as the share of services trade to total service value added, on economic growth in selected Organization of Islamic Conference (OIC) countries. Using the data over the period 1991-2005, the results approve the existence of strong and positive relation between services trade openness and economic growth in these countries.