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New Evidence on the Export-led Growth Nexus: A Case Study of Malaysia


  • Renuka Mahadevan


This paper revisits the highly debated export-led growth hypothesis in a number of different ways using Malaysia as a case study. First, the hypothesis is tested in terms of labour and total factor productivity growth as a potential channel via which exports can affect or be affected by GDP growth. Considering the impact of imports on GDP and productivity growth serves a similar purpose. In addition, GDP is trade-adjusted to avoid the double-counting problem arising from the national income identity. Second, the relationships are examined using the relatively recent Toda and Yamamoto (1995 ) causality tests. These results have major implications and are necessary to reassess the effectiveness of trade policy as a strategy for economic development. Copyright 2007 The Author Journal compilation 2007 Blackwell Publishing Ltd .

Suggested Citation

  • Renuka Mahadevan, 2007. "New Evidence on the Export-led Growth Nexus: A Case Study of Malaysia," The World Economy, Wiley Blackwell, vol. 30(7), pages 1069-1083, July.
  • Handle: RePEc:bla:worlde:v:30:y:2007:i:7:p:1069-1083

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    References listed on IDEAS

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    9. Navas-Ruiz, Antonio & Sala, Davide, 2007. "Technology adoption and the selection effect of trade," UC3M Working papers. Economics we076737, Universidad Carlos III de Madrid. Departamento de Economía.
    10. Osamu Onodera, 2008. "Trade and Innovation Project: A Synthesis Paper," OECD Trade Policy Papers 72, OECD Publishing.
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    12. Peter Gustafsson & Paul Segerstrom, 2010. "Trade Liberalization and Productivity Growth," Review of International Economics, Wiley Blackwell, vol. 18(2), pages 207-228, May.
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    Cited by:

    1. Berhanu Abegaz & Arnab K. Basu, 2011. "The Elusive Productivity Effect of Trade Liberalization in the Manufacturing Industries of Emerging Economies," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 47(1), pages 5-27, January.
    2. repec:sdo:regaec:v:26:y:2017:i:3_5 is not listed on IDEAS
    3. Berhanu Abegaz & Arnab K. Basu, 2011. "The Elusive Productivity Effect of Trade Liberalization in the Manufacturing Industries of Emerging Economies," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 47(1), pages 5-27, January.
    4. Arslan Razmi, 2009. "Must Improved Labor Standards Hurt Accumulation in the Targeted Sector? Stylized Analysis of a Developing Economy," UMASS Amherst Economics Working Papers 2009-09, University of Massachusetts Amherst, Department of Economics.
    5. Gonzalo Hernandez & Arslan Razmi, 2011. "Can Asia Sustain an Export-Led Growth Strategy in the Aftermath of the Global Crisis? An Empirical Exploration," UMASS Amherst Economics Working Papers 2011-29, University of Massachusetts Amherst, Department of Economics.
    6. Lean, Hooi Hooi & Smyth, Russell, 2010. "Multivariate Granger causality between electricity generation, exports, prices and GDP in Malaysia," Energy, Elsevier, vol. 35(9), pages 3640-3648.
    7. Abdullahi Ahmed & Enjiang Cheng & George Messinis, 2011. "The role of exports, FDI and imports in development: evidence from Sub-Saharan African countries," Applied Economics, Taylor & Francis Journals, vol. 43(26), pages 3719-3731.
    8. Mahadevan, Renuka & Suardi, Sandy, 2011. "The effects of uncertainty dynamics on exports, imports and productivity growth," Journal of Asian Economics, Elsevier, vol. 22(2), pages 174-188, April.
    9. Lean, Hooi Hooi & Smyth, Russell, 2010. "On the dynamics of aggregate output, electricity consumption and exports in Malaysia: Evidence from multivariate Granger causality tests," Applied Energy, Elsevier, vol. 87(6), pages 1963-1971, June.

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