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Exactly what is the link between export and growth in Taiwan? new evidence from the Granger causality test

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Author Info
Shyh-Wei Chen () (Tunghai University)
Abstract

We assess the validity of the Export-led Growth (ELG) and the Growth-driven Export (GDE) hypotheses in Taiwan by testing for Granger causality using the vector error correction model (VECM) and the bounds testing methodology developed by Pesaran {\it et al.} (PSS, 2001). The empirical results substantiate that a long-run level equilibrium relationship exists among exports, output, terms of trade and labor productivity of the model and that Granger causal flow between real exports and real output is reciprocal. Thus, our results attest to the advantage of the export-led growth strategy for continuous growth in Taiwan.

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File URL: http://economicsbulletin.vanderbilt.edu/2007/volume6/EB-06F40006A.pdf
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Article provided by Economics Bulletin in its journal Economics Bulletin.

Volume (Year): 6 (2007)
Issue (Month): 7 ()
Pages: 1-10
Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Handle: RePEc:ebl:ecbull:v:6:y:2007:i:7:p:1-10

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Related research
Keywords: Bounds test Economic growth Exports Granger causality

Find related papers by JEL classification:
F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables

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  1. Pesaran, M. H. & Smith, Ron P., 1998. "Structural Analysis of Cointegrating VARs," Cambridge Working Papers in Economics 9811, Faculty of Economics, University of Cambridge.
    Other versions:
  2. Ahmad, Jaleel & Kwan, Andy C. C., 1991. "Causality between exports and economic growth : Empirical evidence from Africa," Economics Letters, Elsevier, vol. 37(3), pages 243-248, November. [Downloadable!] (restricted)
  3. Titus O. Awokuse, 2003. "Is the export-led growth hypothesis valid for Canada?," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 126-136, February. [Downloadable!] (restricted)
  4. Toda, Hiro Y & Phillips, Peter C B, 1993. "Vector Autoregressions and Causality," Econometrica, Econometric Society, vol. 61(6), pages 1367-93, November. [Downloadable!] (restricted)
    Other versions:
  5. Kunst, Robert M & Marin, Dalia, 1989. "On Exports and Productivity: A Causal Analysis," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 699-703, November. [Downloadable!] (restricted)
  6. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326. [Downloadable!]
  7. C. Michael Wernerheim, 2000. "Cointegration and causality in the exports-GDP nexus: The post-war evidence for Canada," Empirical Economics, Springer, vol. 25(1), pages 111-125. [Downloadable!] (restricted)
  8. Pesaran, M. H. & Shin, Y. & Smith, R. J., 1997. "Structural Analysis of Vector Error Correction Models with Exogenous I(1) Variables," Cambridge Working Papers in Economics 9706, Faculty of Economics, University of Cambridge.
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  9. Paul Turner, 2006. "Response surfaces for an F -test for cointegration," Applied Economics Letters, Taylor and Francis Journals, vol. 13(8), pages 479-482, June. [Downloadable!] (restricted)
  10. Ahmad, Jaleel & Harnhirun, Somchai, 1995. "Unit roots and cointegration in estimating causality between exports and economic growth: Empirical evidence from the ASEAN countries," Economics Letters, Elsevier, vol. 49(3), pages 329-334, September. [Downloadable!] (restricted)
  11. Reppas, Panayiotis A. & Christopoulos, Dimitris K., 2005. "The export-output growth nexus: Evidence from African and Asian countries," Journal of Policy Modeling, Elsevier, vol. 27(8), pages 929-940, November. [Downloadable!] (restricted)
  12. Thornton, John, 1997. "Exports and economic growth: Evidence from 19th Century Europe1," Economics Letters, Elsevier, vol. 55(2), pages 235-240, August. [Downloadable!] (restricted)
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This page was last updated on 2008-7-12.

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