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Exactly what is the link between export and growth in Taiwan? new evidence from the Granger causality test

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  • Shyh-Wei Chen

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    (Tunghai University)

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    Abstract

    We assess the validity of the Export-led Growth (ELG) and the Growth-driven Export (GDE) hypotheses in Taiwan by testing for Granger causality using the vector error correction model (VECM) and the bounds testing methodology developed by Pesaran {\it et al.} (PSS, 2001). The empirical results substantiate that a long-run level equilibrium relationship exists among exports, output, terms of trade and labor productivity of the model and that Granger causal flow between real exports and real output is reciprocal. Thus, our results attest to the advantage of the export-led growth strategy for continuous growth in Taiwan.

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    File URL: http://www.accessecon.com/pubs/EB/2007/Volume6/EB-06F40006A.pdf
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    Article provided by AccessEcon in its journal Economics Bulletin.

    Volume (Year): 6 (2007)
    Issue (Month): 7 ()
    Pages: 1-10

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    Handle: RePEc:ebl:ecbull:eb-06f40006
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    Find related papers by JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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    1. Pesaran, M. H. & Smith, Ron P., 1998. "Structural Analysis of Cointegrating VARs," Cambridge Working Papers in Economics 9811, Faculty of Economics, University of Cambridge.
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    12. Perron, Pierre, 1989. "The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Econometrica, Econometric Society, vol. 57(6), pages 1361-1401, November.
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    15. Thornton, John, 1996. "Cointegration, causality and export-led growth in Mexico, 1895-1992," Economics Letters, Elsevier, vol. 50(3), pages 413-416, March.
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    17. Reppas, Panayiotis A. & Christopoulos, Dimitris K., 2005. "The export-output growth nexus: Evidence from African and Asian countries," Journal of Policy Modeling, Elsevier, vol. 27(8), pages 929-940, November.
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    Cited by:

    1. Akmal, Muhammad Shahbaz & Ahmad, Khalil & Ali, Muhammad, 2009. "Exports-Led Growth Hypothesis in Pakistan: Further Evidence," MPRA Paper 16043, University Library of Munich, Germany.
    2. Bilas Vlatka & Franc Sanja & Bošnjak Mile, 2015. "Examining the Export-led Growth Hypothesis: The case of Croatia," Naše gospodarstvo/Our economy, De Gruyter Open, vol. 61(3), pages 22-31, June.

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