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Nonlinearity in ASEAN-5 export-led growth model: Empirical evidence from nonparametric approach

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  • Lim, Shiok Ye
  • Ho, Chong Mun

Abstract

The nonlinearity effect on the relationship between export and economic growth has been highly debated in recent research. In previous literature of export-led growth hypothesis, the possibility of nonlinearity in the relationship has been generally ignored. There were comprehensive studies based on linear model, but only a few isolated cases in developed countries focused on nonlinearity in testing this hypothesis. The key drawback of the linear model is the restricted classical assumptions in hypothesis testing. Moreover, the linear model may possibly overlook a significant nonlinear relationship. In this study, the potential nonlinear long-run and short-run relationships are respectively examined by nonparametric cointegration test and nonlinear causality test, in ASEAN-5 countries. The nonparametric cointegration results contribute to the literature by highlighting the nonlinear long-run relationship between exports and GDP per capita for Malaysia, Thailand, Indonesia and Singapore. The findings obtained from the nonlinear causality test also showed that the causal effect of export and GDP is in the nonlinear form, in the case of Thailand and the Philippines.

Suggested Citation

  • Lim, Shiok Ye & Ho, Chong Mun, 2013. "Nonlinearity in ASEAN-5 export-led growth model: Empirical evidence from nonparametric approach," Economic Modelling, Elsevier, vol. 32(C), pages 136-145.
  • Handle: RePEc:eee:ecmode:v:32:y:2013:i:c:p:136-145
    DOI: 10.1016/j.econmod.2013.01.044
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    References listed on IDEAS

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    Cited by:

    1. Ming-Hsien YANG & Chih-She WU, 2015. "Revisit Export and GDP Nexus in China and Taiwan: A Rolling Window Granger Causality Test," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(604), A), pages 75-92, Autumn.
    2. Ahdi N. Ajmi & Goodness C. Aye & Mehmet Balcilar & Rangan Gupta, 2015. "Causality between exports and economic growth in South Africa: evidence from linear and nonlinear tests," Journal of Developing Areas, Tennessee State University, College of Business, vol. 49(2), pages 163-181, April-Jun.
    3. Rangan Gupta & Lardo Stander & Andrea Vaona, 2017. "Openness and Growth: Is the Relationship Non-Linear?," Working Papers 201703, University of Pretoria, Department of Economics.
    4. repec:agr:journl:v:3(604):y:2015:i:3(604):p:75-92 is not listed on IDEAS

    More about this item

    Keywords

    Export-led growth; Nonparametric cointegration; Nonlinear causality;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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