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Economic Growth in Latin American Countries: Is It Based on Export-Led or Import-Led Growth?

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  • Werner R
  • Josephine Olson

Abstract

Using a data cointegration panel with error correction, we analyze the principal theories of international trade and economic growth—export-led growth (ELG), growth-led exports (GLE), and import-led growth (ILG)—for Latin American countries. The results demonstrate that exports drive growth of gross domestic product (GDP). Although the effects of imports on growth are generally negative, in our disaggregated analysis by country, we find results for eight countries support the ELG theory, results for five countries support the ILG theory, results for one country support both theories and results for one country support neither theory. An interesting finding is the negative correlation between the impacts of exports and the impacts of imports on GDP growth, which implies that, in theory, ELG and ILG cannot exist simultaneously in a country.

Suggested Citation

  • Werner R & Josephine Olson, 2014. "Economic Growth in Latin American Countries: Is It Based on Export-Led or Import-Led Growth?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 50(S1), pages 6-20.
    • Handle: RePEc:mes:emfitr:v:50:y:2014:i:s1:p:6-20
    DOI: 10.2753/REE1540-496X5001S101
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    Citations

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    Cited by:

    1. Arteaga, Julio César & Cardozo, Mónica Liseth & Diniz, Márcia Jucá T., 2020. "Exports to China and economic growth in Latin America, unequal effects within the region," International Economics, Elsevier, vol. 164(C), pages 1-17.
    2. Alper Aslan & Ebru Topcu, 2018. "The Relationship between Export and Growth: Panel Data Evidence from Turkish Sectors," Economies, MDPI, vol. 6(2), pages 1-15, April.
    3. Javier Alejandro Vera Vargas & Werner Kristjanpoller Rodríguez, 2017. "Granger causality between exports, economic growth and electricity production: empirical evidence for Latin America," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 86, pages 25-62, Enero - J.
    4. Sayef Bakari, 2017. "The Three-Way Linkages Between Export, Import And Economic Growth: New Evidence From Tunisia," Journal of Smart Economic Growth, , vol. 2(3), pages 13-53, December.
    5. Magdalena Vlahova-Veleva, 2020. "The Euro‘s effect on trade," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 26-45,46-65.
    6. Ana Paula Ribeiro & Vitor Carvalho & Paula Santos, 2016. "Export-Led Growth in the EU: Where and What to Export?," The International Trade Journal, Taylor & Francis Journals, vol. 30(4), pages 319-344, August.
    7. Vera Vargas, Javier Alejandro & Kristjanpoller Rodríguez, Werner, 2016. "Causalidad de Granger entre composición de las exportaciones, crecimiento económico y producción de energía eléctrica: evidencia empírica para Latinoamérica," Revista Lecturas de Economía, Universidad de Antioquia, CIE, issue 86, pages 25-62, December.
    8. Mohamad A. Abou Hamia, 2022. "What level of international technology should developing countries transfer to sustain their economic growth?," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(6), pages 4217-4239, December.
    9. Samargandi, Nahla & Kutan, Ali M., 2016. "Private credit spillovers and economic growth: Evidence from BRICS countries," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 44(C), pages 56-84.
    10. Vinícius Luís Souza Nonato & Carlos Enrique Carrasco-Gutierrez, 2023. "Trade-led growth hypothesis: evidence from Latin America countries," Empirical Economics, Springer, vol. 64(2), pages 727-745, February.

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