Question

How do outward oriented properties affect a nation's productivity?

Answer 1

Inward-oriented trade policies are comparable to restriction on the use of advanced technologies since it restricts the investment from abroad. On the contrary, outward-oriented policies remove constraints on trade as well as on foreign investment whereby promoting integration with the global economy. It is analogous to discovering new technologies which in turn improves productivity and living standards. It has also been observed that countries which remove trade constraints experience the same kind of economic growth which would have occurred after major technological progress.