Over the years, there has been extensive research on the relationship between a country’s export and economic growth with ambiguous and mixed results. Instead of using the conventional cointegration approach, this paper re-examines the export-led growth hypothesis for Kenya using autoregressive distributed lag (ADRL) bounds technique. This approach is capable of testing for the existence of a long-run relationship regardless of whether the underlying time series are individually I(1) or I(0). This enhances the stability and robustness of our results. In addition, we examine the Granger causality between exports and economic growth over the sample period. The results indicate that there exists a long-term relationship between GDP growth and exports, and it is unidirectional, running from exports to GDP growth. Hence, in the case of Kenya, export enhancing policies are recommended in promoting and sustaining economic growth.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
5582.
Find related papers by JEL classification: C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
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