Exports, imports and economic growth in China: an ARDL analysis
AbstractPurpose – The purpose of this paper is to investigate the export-led growth, growth-led export, import-led growth, growth-led import and foreign deficit sustainability hypothesis in the case of China, using annual time series data from 1978-2009. Design/methodology/approach – For estimation evidence this study employs the Phillips Perron unit root tests to examine the level of integration and the autoregressive distributed lag (ARDL) approach is employed to determine the long run relationship, and the direction of long run and short run causal relationship is examined by using modified Granger causality test. Findings – The results confirm the bidirectional long run relationship between the economic growth and exports, economic growth and imports, and exports and imports. These findings guided the authors to conclude that the exports-led growth, growth-led exports, imports-led growth and growth-led imports hypothesis is valid, and foreign deficit is sustainable for China. The long run elasticities are as follows: the elasticity of economic growth with respect to exports is 0.591, and elasticity of exports with respect to economic growth is 1.635. The elasticity of economic growth with respect to imports is 0.621, and elasticity of imports with respect to economic growth is 1.392. Further more the elasticity of exports with respect to imports is 1.322, and imports elasticity with respect to exports is 0.975. Originality/value – This study utilizes the relative new cointegration method of ARDL approach. The empirical findings of this study are vital for policy makers of China in the formulation of trade policies. JEL classification: F43, C23, F15.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Emerald Group Publishing in its journal Journal of Chinese Economic and Foreign Trade Studies.
Volume (Year): 5 (2012)
Issue (Month): 1 (February)
Contact details of provider:
Web page: http://www.emeraldinsight.com
Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
Find related papers by JEL classification:
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- F15 - International Economics - - Trade - - - Economic Integration
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kravis, Irving B, 1970. "Trade as a Handmaiden of Growth: Similarities between the Nineteenth and Twentieth Centuries," Economic Journal, Royal Economic Society, vol. 80(323), pages 850-72, December.
- Bahmani-Oskooee, Mohsen & Mohtadi, Hamid & Shabsigh, Ghiath, 1991. "Exports, growth and causality in LDCs : A re-examination," Journal of Development Economics, Elsevier, vol. 36(2), pages 405-415, October.
- Augustin Kwasi Fosu, 1996. "Primary Exports and Economic Growth in Developing Countries," The World Economy, Wiley Blackwell, vol. 19(4), pages 465-475, 07.
- Balassa, Bela, 1978. "Exports and economic growth : Further evidence," Journal of Development Economics, Elsevier, vol. 5(2), pages 181-189, June.
- Ram, Rati, 1985. "Exports and Economic Growth: Some Additional Evidence," Economic Development and Cultural Change, University of Chicago Press, vol. 33(2), pages 415-25, January.
- Singer, Hans W. & Gray, Patricia, 1988. "Trade policy and growth of developing countries: some new data," World Development, Elsevier, vol. 16(3), pages 395-403, March.
- Alam, M Shahid, 1991. "Trade Orientation and Macroeconomic Performance in LDCs: An Empirical Study," Economic Development and Cultural Change, University of Chicago Press, vol. 39(4), pages 839-48, July.
- Jose De Gregorio, 1991.
"Economic Growth in Latin America,"
IMF Working Papers
91/71, International Monetary Fund.
- 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.
- Salvatore, Dominick, 1983. "A Simultaneous Equations Model of Trade and Development with Dynamic Policy Simulations," Kyklos, Wiley Blackwell, vol. 36(1), pages 66-90.
- Robert McNab & Robert Moore, 1998. "Trade policy, export expansion, human capital and growth," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 7(2), pages 237-256.
- Paresh Kumar Narayan & Russell Smyth, 2004. "Temporal Causality and the Dynamics of Exports, Human Capital and Real Income in China," The International Journal of Applied Economics, Department of General Business, Southeastern Louisiana University, vol. 1(1), pages 24-45, September.
- Moschos, Demetrios, 1989. "Export expansion, growth and the level of economic development: An empirical analysis," Journal of Development Economics, Elsevier, vol. 30(1), pages 93-102, January.
- Chow, Gregory & Lin, An-loh, 2002. "Accounting for Economic Growth in Taiwan and Mainland China: A Comparative Analysis," Journal of Comparative Economics, Elsevier, vol. 30(3), pages 507-530, September.
- Ram, Rati, 1987. "Exports and Economic Growth in Developing Countries: Evidence from Time-Series and Cross-Section Data," Economic Development and Cultural Change, University of Chicago Press, vol. 36(1), pages 51-72, October.
- Fosu, Augustin Kwasi, 1990. "Exports and economic growth: The African case," World Development, Elsevier, vol. 18(6), pages 831-835, June.
- Katircioglu, Salih & Eminer, Fehiman & Aga, Mehmet & Ozyigit, Ahmet, 2010. "Trade and Growth in the Pacific Islands - Empirical Evidence from the Bounds Test to Level Relationships and Granger Causality Tests," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 88-101, December.
- 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.
- Otani, Ichiro & Villanueva, Delano, 1990. "Long-term growth in developing countries and its determinants: An empirical analysis," World Development, Elsevier, vol. 18(6), pages 769-783, June.
- Jung, Woo S. & Marshall, Peyton J., 1985. "Exports, growth and causality in developing countries," Journal of Development Economics, Elsevier, vol. 18(1), pages 1-12.
- Tyler, William G., 1981. "Growth and export expansion in developing countries : Some empirical evidence," Journal of Development Economics, Elsevier, vol. 9(1), pages 121-130, August.
- Bela Balassa, 1978. "Export incentives and export performance in developing countries: A comparative analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 114(1), pages 24-61, March.
- Kavoussi, Rostam M., 1984. "Export expansion and economic growth : Further empirical evidence," Journal of Development Economics, Elsevier, vol. 14(1), pages 241-250.
- Titus Awokuse, 2005. "Exports, economic growth and causality in Korea," Applied Economics Letters, Taylor & Francis Journals, vol. 12(11), pages 693-696.
- Jordan Shan & Fiona Sun, 1998. "On the export-led growth hypothesis: the econometric evidence from China," Applied Economics, Taylor & Francis Journals, vol. 30(8), pages 1055-1065.
- Qazi Muhammad Adnan Hye & Houda Ben Haj Boubaker, 2011. "Exports, Imports and Economic Growth: An Empirical Analysis of Tunisia," The IUP Journal of Monetary Economics, IUP Publications, vol. 0(1), pages 6-21, February.
- 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.
- Tuck Cheong Tang, 2006. "New evidence on export expansion, economic growth and causality in China," Applied Economics Letters, Taylor & Francis Journals, vol. 13(12), pages 801-803.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Harris).
If references are entirely missing, you can add them using this form.