The E?ect of foreign trade on economic growth in the Republic of Srpska
Keywords:foreign trade, economic growth, economic structure, Republic of Srpska, regression and correlation analysis
Ever since Adam Smith the scientists have been investing enormous e?orts to explore and prove relationships between the foreign exchange and economic growth. One thing in common to all researches so far is that there is no complete agreement on a direct, positive inter-relation between the foreign exchange and economic growth. However, the major number of researches confirm the existence of the statistically significant, direct relation. The special attention is paid to the analysis of the in?uence of the foreign trade to the developing countries, principally as a channel for the import of new technologies by which it has been proven that the growth of the import does not have to have necessarily a negative impact to the economic growth but it may also impact the productivity growth, i.e. indirectly the total economic growth of the country of import.
The research of the in?uence of the foreign trade to the economic growth becomes even more relevant after year 2008, i.e. after the world economic crisis as small, open economies, such as the Republic of Srpska see its “development drive” in the growth of the export through the consolidation of the developed countries and thus additional growth of the foreign demand. That is why in our paper we have tried to explore the relevance of the foreign trade to the economic growth of the Republic of Srpska, to analyse the foreign trade exchange of Republic of Srpska in order to determine the weaknesses of its commodity structure and the relations with the leading foreign trade partners as well as to explore the interrelated, quantitative relation between the foreign trade and the GDP of Republic of Srpska.
Summarizing the results of our research we have come to a conclusion that the foreign trade is very relevant for the economic movements in the Republic of Srpska, i.e. the relevance of the foreign trade for the economic development of Republic of Srpska is very high. However, it is necessary to work on the decreasing of the foreign trade deficit through the increase of the export and the improvement of its commodity structure as well as through the selective decreasing of the import. Before all this, it is necessary to undertake the change of economic structure and considerably increase the competitiveness of the domestic producers.
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