Do Financial Liberalization and Gender Inequality Moderate Trade Liberalization's Impact on Growth in European Transition Economies?

Abstract

We assess the influence of trade liberalization on economic growth in European transition economies from 2000 to 2022. Both trade and financial liberalization contribute to economic growth. Financial liberalization facilitates the movement of internal and external assets, and encourages cross-border investments, strengthening the relationship between trade liberalization and economic growth. Our results support the notion that negative side effects of liberalization are not observed in European transition economies. However, gender inequality dampens the positive effect of trade liberalization on economic growth. As gender inequality is a social factor affecting economic growth, meaningful policies are needed to reduce it.