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The Causal Nexus between Exports and Economic Growth: Evidence on the Role of Omitted Variables

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  • Yaya Keho

    (Ecole Nationale Sup rieure de Statistique et d'Economie Appliqu e, Abidjan, C te d'Ivoire)

Abstract

Over the past two decades, the export-growth nexus has been extensively investigated yielding to inconclusive findings. Most of existing studies used a bivariate framework ignoring the role of other relevant variables. This study re-examines the nexus for 12 African countries by incorporating capital, labor, and imports into the analysis. The results are sensitive to the inclusion of controlling variables. Within the bivariate framework, we found longrun relationships between export and output in eight countries and the export-led growth hypothesis holds in Benin, Burkina Faso, Cameroon, Gabon, Ghana, Nigeria, and South Africa. However, when capital, labor and imports are controlled for, the results show long-run relationships among the variables in all countries and the export-led growth hypothesis holds in Cameroon, Cote d'Ivoire, Gabon, Ghana, Senegal, and South Africa. These results highlight the risk of misleading conclusions based on bivariate models.

Suggested Citation

  • Yaya Keho, 2018. "The Causal Nexus between Exports and Economic Growth: Evidence on the Role of Omitted Variables," International Journal of Economics and Financial Issues, Econjournals, vol. 8(4), pages 335-344.
    • Handle: RePEc:eco:journ1:2018-04-42
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    References listed on IDEAS

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    More about this item

    Keywords

    Export; import; economic growth;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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