Are Thai Manufacturing Exports and Imports of Capital Goods Related?
AbstractThis paper examines the relationship between manufacturing exports and imports of capital goods in Thailand using monthly data from January 2000 to July 2011. The results from bounds testing for cointegration show that there exists long-run equilibrium relationship between exports and imports of capital goods in manufacturing sector. In addition, the positive relationship between the growth rate of imports of capital goods and the growth rate of manufacturing exports is observed. The results support the notion that foreign capital is essential in the process of industrialization, and thus economic growth. A decline in imports of capital goods will reduce manufacturing exports and impedes economic growth in the future. It is also likely that exports of manufactured products are the main source of foreign exchanges to finance imports of capital goods which cannot be produced in the country due to comparative disadvantage.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 45654.
Date of creation: Nov 2011
Date of revision:
Manufacturing Exports; Imports of Capital Goods; Economic Growth; Cointegration; Causality;
Find related papers by JEL classification:
- C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
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