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Export externalities and economic growth*

* This paper is a replication of an original study

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  • Izani Ibrahim
  • Craig MacPhee

Abstract

Feder formulated the first model with an explicit mechanism connecting international trade and economic growth. We present new econometric estimates of this unique model for 30 developing countries studied by Feder. We replicate Feder's 1964 - 73 cross-section estimates for 1974 - 83 and 1984 - 93 and find that the export variables lose significance and that the model has less explanatory power overall. We also try to improve on time-series estimates by Ram and find that the coefficient of Feder's total factor productivity differential in favour of the export sector was positive and significant for 18 of the 30 countries. The export externality coefficient proved to be positive and significant in 13 countries although significant multicollinearity occurs in the regressions for eight of the 13. Comparisons of the results among countries suggest that the impact of exports on growth depends on population size, trade orientation, and the importance of manufacturing.

Suggested Citation

  • Izani Ibrahim & Craig MacPhee, 2003. "Export externalities and economic growth," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 12(3), pages 257-283.
    • Handle: RePEc:taf:jitecd:v:12:y:2003:i:3:p:257-283
    DOI: 10.1080/0963819032000132076
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    References listed on IDEAS

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    1. Sanjaya Lall & Frances Stewart (ed.), 1986. "Theory and Reality in Development," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-18128-5.
    2. Esfahani, Hadi Salehi, 1991. "Exports, imports, and economic growth in semi-industrialized countries," Journal of Development Economics, Elsevier, vol. 35(1), pages 93-116, January.
    3. G. K. Helleiner, 1986. "Outward Orientation, Import Instability and African Economic Growth: an Empirical Investigation," Palgrave Macmillan Books, in: Sanjaya Lall & Frances Stewart (ed.), Theory and Reality in Development, chapter 9, pages 139-153, Palgrave Macmillan.
    4. Hollis Chenery† & T.N. Srinivasan (ed.), 1989. "Handbook of Development Economics," Handbook of Development Economics, Elsevier, edition 1, volume 2, number 2.
    5. Haitovsky, Yoel, 1969. "Multicollinearity in Regression Analysis: Comment," The Review of Economics and Statistics, MIT Press, vol. 51(4), pages 486-489, November.
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    Citations

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    Cited by:

    1. 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.
    2. Pahlavani, Mosayeb, 2005. "The Relationship Between Trade and Economic Growth in Iran: An Application of a New Cointegration Technique in the Presence of Structural Breaks," Economics Working Papers wp05-28, School of Economics, University of Wollongong, NSW, Australia.
    3. Mladenović Jelena & Lepojević Vinko & Janković-Milić Vesna, 2016. "Modelling and Prognosis of the Export of the Republic of Serbia by Using Seasonal Holt-Winters and Arima Method," Economic Themes, Sciendo, vol. 54(2), pages 233-260, June.
    4. Pahlavani, M., 2005. "Sources Of Economic Growth In Iran: A Cointegration Analysis In The Presence Of Structural Breaks, 1960-2003," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 5(4).
    5. 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.

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    Replication

    This item is a replication of:
  • Feder, Gershon, 1983. "On exports and economic growth," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 59-73.

    • More about this item

    Keywords

    Exports; economic growth;

    Lists

    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. Export externalities and economic growth (J Int Trade & Econ Dev 2003) in ReplicationWiki

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