Linear and Nonlinear Causal Linkages Between Exports and Growth in Next Eleven Economies

Although a plethora of literature has shed light on the export-growth nexus over the past few decades, most studies have maintained the assumption of linear symmetric causal linkages. The current research contributes to the existing literature by investigating the export-growth linear and nonlinear causal relationships in Next Eleven emerging economies during the period 1960–2020. The empirical analysis is based on the Toda-Yamamoto linear causality test and the Kyrtsou-Labys nonlinear symmetric and asymmetric causality tests. The Toda-Yamamoto linear causality test suggests little evidence of significant causal relationships between exports and growth. According to the symmetric version of the Kyrtsou-Labys nonlinear causality test, the export-led growth hypothesis holds for only four countries, while the growth-led exports hypothesis is valid for five countries. When using the asymmetric version of the Kyrtsou-Labys nonlinear causality test, the obtained findings, albeit mixed, provide fresh insights into the relationship between exports and growth. The analysis particularly reveals that exports and growth are more sensitive to negative than positive shocks.