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Export and Income Growth in Japan and Taiwan


  • Xu, Zhenhui


Economic theory suggests that export growth promotes economic growth. Yet empirical research has not found clear support for the export-led growth hypothesis, even for the newly industrialized economies where the theory should be most applicable. This paper provides an explanation for the apparent discrepancy between the theory and the empirical results. It shows that causality inferences on the export-led growth hypothesis are sensitive to unit roots or near-unit roots in the time series and to the lag structure chosen for causality tests. Therefore, the issues of unit root and lag structure deserve scrutiny in empirical research. Copyright 1998 by Blackwell Publishing Ltd.

Suggested Citation

  • Xu, Zhenhui, 1998. "Export and Income Growth in Japan and Taiwan," Review of International Economics, Wiley Blackwell, vol. 6(2), pages 220-233, May.
  • Handle: RePEc:bla:reviec:v:6:y:1998:i:2:p:220-33

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    References listed on IDEAS

    1. Alan Woodland & Kishti Sen, 2010. "The volatility of Australian traded goods' prices," Applied Economics, Taylor & Francis Journals, vol. 42(30), pages 3849-3869.
    2. Elie Appelbaum & Alan D. Woodland, 2010. "The Effects of Foreign Price Uncertainty on Australian Production and Trade," The Economic Record, The Economic Society of Australia, vol. 86(273), pages 162-177, June.
    3. Stuart Glosser & Lonnie Golden, 2005. "Is labour becoming more or less flexible? Changing dynamic behaviour and asymmetries of labour input in US manufacturing," Cambridge Journal of Economics, Oxford University Press, vol. 29(4), pages 535-557, July.
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    Cited by:

    1. Hatemi-J, Abdulnasser, 2002. "Export performance and economic growth nexus in Japan: a bootstrap approach," Japan and the World Economy, Elsevier, vol. 14(1), pages 25-33, January.
    2. Krishna, Kala & Ozyildirim, Ataman & Swanson, Norman R., 2003. "Trade, investment and growth: nexus, analysis and prognosis," Journal of Development Economics, Elsevier, vol. 70(2), pages 479-499, April.
    3. Xu, Zhenhui, 2003. "Purchasing power parity, price indices, and exchange rate forcasts," Journal of International Money and Finance, Elsevier, vol. 22(1), pages 105-130, February.
    4. Shahbaz, Muhammad, 2012. "Does trade openness affect long run growth? Cointegration, causality and forecast error variance decomposition tests for Pakistan," Economic Modelling, Elsevier, vol. 29(6), pages 2325-2339.
    5. Abdulnasser Hatemi-J & Manuchehr Irandoust, 2000. "Export performance and economic growth causality: An empirical analysis," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 28(4), pages 412-426, December.
    6. Tang, Chor Foon & Lai, Yew Wah & Ozturk, Ilhan, 2015. "How stable is the export-led growth hypothesis? Evidence from Asia's Four Little Dragons," Economic Modelling, Elsevier, vol. 44(C), pages 229-235.
    7. Tang, Chor Foon & Lai, Yew Wah, 2011. "The Stability of Export-led Growth Hypothesis: Evidence from Asia's Four Little Dragons," MPRA Paper 27962, University Library of Munich, Germany.
    8. César Calderón & Alberto Chong & Luisa Zanforlin, 2001. "On Non-Linearities Between Exports Of Manufactures And Economic Growth," Journal of Applied Economics, Universidad del CEMA, vol. 4, pages 279-311, November.

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