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Export expansion and economic growth: testing for cointegration and causality

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  • Muhammed Islam
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    Abstract

    This paper develops a multivariate error-correction model to test the causality between exports and growth in 15 Asian countries, 1967-91. The underlying series are tested as non-stationary in levels but stationary in first differences. The causal factors are cointegrated in five of these countries only. Causality test results indicate that export expansion causes growth in two-third of these countries, corrected for simultaneity between the causal factors. A country with a large public sector, higher level of economic development, and which is less vulnerable to external economic shocks is more likely to reap the benefits of export promotion strategies. The causal inferences are fairly stable over the sample period.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/000368498325930
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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Applied Economics.

    Volume (Year): 30 (1998)
    Issue (Month): 3 ()
    Pages: 415-425

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    Handle: RePEc:taf:applec:v:30:y:1998:i:3:p:415-425

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    Cited by:
    1. Banga, Rashmi & Das, Abhijit, 2010. "Role of trade policies in growth of Indian manufacturing sector," MPRA Paper 35198, University Library of Munich, Germany.
    2. László Kónya & Jai Pal Singh, 2006. "Exports, Imports and Economic Growth in India," Working Papers 2006.06, School of Economics, La Trobe University.
    3. Pablo Fajnzylber & J. Luis Guasch & J. Humberto López, 2009. "Does the Investment Climate Matter? Microeconomic Foundations of Growth in Latin America," World Bank Publications, The World Bank, number 6300, October.
    4. Jaime Andrés Collazos & Pedro Luis Rosero, 2010. "¿Posee el Valle del Cauca una economía transformadora de importaciones orientadas a la Exportación?," DOCUMENTOS DE POLÍTICAS PÚBLICAS 006880, UNIVERSIDAD ICESI.
    5. Eusuf, M Abu & Ahmed, Mansur, 2007. "Causality between Export and Growth: Evidence from South Asian Countries," MPRA Paper 21027, University Library of Munich, Germany, revised 25 May 2008.
    6. repec:pdn:wpaper:52 is not listed on IDEAS
    7. Christine Mutz & Thomas Ziesemer, 2008. "Simultaneous estimation of income and price elasticities of export demand, scale economies and total factor productivity growth for Brazil," Applied Economics, Taylor & Francis Journals, vol. 40(22), pages 2921-2937.
    8. World Bank, 2007. "Economic Performance in Latin America and the Caribbean : A Microeconomic Perspective," World Bank Other Operational Studies 7857, The World Bank.
    9. Aurangzeb, 2003. "Trade, Investment and Growth Nexus in Pakistan: An Application of Cointegration and Multivariate Causality Test," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 8(1), pages 119-137, Jan-June.
    10. Thomas Gries & Margarete Redlin, 2012. "Trade Openness and Economic Growth: A Panel Causality Analysis," Working Papers CIE 52, University of Paderborn, CIE Center for International Economics.
    11. Aka, Bédia F. & Dumont, J.C., 2008. "HEALTH, EDUCATION AND ECONOMIC GROWTH: TESTING FOR LONG-RUN RELATIONSHIPS AND CAUSAL LINKS in the United States," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 8(2), pages 101-110.
    12. Dawson, P.J., 2006. "The export-income relationship and trade liberalisation in Bangladesh," Journal of Policy Modeling, Elsevier, vol. 28(8), pages 889-896, November.
    13. 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.
    14. Ann Harrison & Andrés Rodríguez-Clare, 2009. "Trade, Foreign Investment, and Industrial Policy for Developing Countries," NBER Working Papers 15261, National Bureau of Economic Research, Inc.
    15. David Gray, 2005. "An examination of regional interaction and super-regions in Britain: An error correction model approach," Regional Studies, Taylor & Francis Journals, vol. 39(5), pages 619-632.
    16. M.A.Hossain, 2001. "On Export-Led Growth: Is Manufacturing Exports a New Engine of Growth for Bangladesh?," Discussion Papers Series 297, School of Economics, University of Queensland, Australia.

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