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Manufactured Exports And Economic Growth In Egypt: Cointegration And Causality Analysis

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  • Neveen M. TORAYEH

Abstract

Although it is widely acknowledged that exports, particularly through manufactured components, play an important role as a potential source of economic growth, the relationship between exports and economic growth is still ongoing. This paper contributes to this controversy using cointegration analysis and Error Correction Model (ECM) test to determine the short and long run causality between manufactured exports and economic growth in Egypt during the period 1980-2008 with particular interest to decompose Egypt's manufactured exports into a number of key industries. The empirical results show that bi-direction long-run causality exists not only between exports of manufactured goods as a whole and economic growth but also in case of few Egyptian export industries like textile products, chemical products, fabricated metal products and food-processing. Furthermore, the short run unidirectional causality from exports of some industries to economic growth is explored. The direction of causality from growth to exports was inferred only in the case of chemical products. The main conclusion is that there is a long run circular causality between manufactured exports and economic growth in Egypt. Therefore, adopting vigorous growth policy is expected to stimulate the manufactured exports. However, the export-led policy seems to be a basic tool toward sustained growth in Egypt. Furthermore, emphasis on the composition of manufactured exports should be considered as a main instrument in the export driving growth policy.

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  • Neveen M. TORAYEH, 2011. "Manufactured Exports And Economic Growth In Egypt: Cointegration And Causality Analysis," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 11(1).
    • Handle: RePEc:eaa:aeinde:v:11:y:2011:i:1_10
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    Cited by:

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    2. Christopher E.S. WARBURTON, 2012. "Globalization And Structural Change In The US Manufacturing Sector, 1987-2010," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 12(1).
    3. Israa A. El Husseiny, 2023. "The relative effectiveness of fiscal and monetary policies in promoting Egypt’s output growth: an empirical investigation using an ARDL approach," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 12(1), pages 1-23, December.
    4. Sayef Bakari & Mohamed Mabrouki & Asma Elmakki, 2018. "The Nexus Between Industrial Exports And Economic Growth In Tunisia: Empirical Analysis," Journal of Smart Economic Growth, , vol. 3(2), pages 31-53, December.
    5. Shrabanti Maity & Anup Sinha, 2021. "Linkages between Economic Growth and Population Ageing with a Knowledge Spillover Effect," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(4), pages 1905-1924, December.
    6. Bakari, Sayef & Mabrouki, Mohamed, 2018. "The Impact of Agricultural Trade on Economic Growth in North Africa: Econometric Analysis by Static Gravity Model," MPRA Paper 85116, University Library of Munich, Germany.

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    More about this item

    Keywords

    Manufactured exports . Egypt . Cointegration . Error Correction;

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F49 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Other
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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