The Nexus Between Trade Openness, Export Sophistication, and Economic Growth

Due to rise in the productivity and globalization, researchers started to focus on the phenomenon of export sophistication and trade openness. This study investigates the impact of trade openness and export sophistication on economic growth. Further, it examines the moderating role of trade openness between export sophistication and economic growth. For this, the current study applies the random effects model to a panel of 35 Organization of Islamic Cooperation (OIC) countries covering the period 2016–2020. The results reveal that both export sophistication and trade openness have a positive impact on economic growth and trade openness further strengthens the impact of export sophistication on economic growth. The results of this study suggest OIC economies should produce sophisticated products and adopt trade oriented-polices.