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Import‐economic growth nexus: ARDL approach to cointegration

Author

Listed:
  • Faridul Islam
  • Qazi Muhammad Adnan Hye
  • Muhammad Shahbaz

Abstract

Purpose - The purpose of this paper is to examine the relationship between import and economic growth for 62 countries. Design/methodology/approach - The paper applies autoregressive distributed lag model (ARDL) for long‐run relation and Granger causality test, in order to detect the direction of short‐run and long‐run causal relationship. Findings - The results indicate that the long‐run relationship exists in the USA, the UK, Japan, Iceland, Canada, Italy, Algeria, Brazil, Chile, Colombia, Cuba, Gabon, Malaysia, Mexico, Peru, South Africa, Uruguay, Bolivia, Cameroon, Cote d'Ivoire, Ecuador, Egypt, El Salvador, Guatemala, Honduras, India, Lesotho, Nicaragua, Papua New Guinea, Thailand, Bangladesh, Benin, Chad, Congo, Gambia, Kenya, Madagascar, Togo, Zambia and Zimbabwe when economic growth is dependent variable. This result confirms the importance of import in the process of sustainable economic growth of these countries. In alternative combination when import is dependent variable, the long‐run relationship is found in the USA, the UK, Japan, Finland, Iceland, Canada, Italy, Brazil, Cuba, Dominican Republic, Iran, Malaysia, Mexico, Peru, South Africa, Bolivia, Cameroon, Guatemala, Honduras, India, Indonesia, Lesotho, Morocco, Nicaragua, Pakistan, Philippines, Senegal, Sudan, Swaziland, Thailand, Tunisia, Bangladesh, Benin, Burkina Faso, Chad, Congo, Gambia, Kenya, Madagascar, Malawi, Mali, Mauritania, Togo and Zambia. These findings confirm the importance of source of economic growth for import. On the other hand, the results of Granger causality test indicate mixed results but the importance is that in the case of higher income countries, there is unidirectional long‐run causality found from import to economic growth (except the USA, Iceland and Italy), and bidirectional long‐run causal relationship exists between import and economic growth in low income countries except Madagascar and Mauritania. Originality/value - This paper provides the largest sample, including 62 countries, examining the relationship between import and economic growth, from 1971 to 2009.

Suggested Citation

  • Faridul Islam & Qazi Muhammad Adnan Hye & Muhammad Shahbaz, 2012. "Import‐economic growth nexus: ARDL approach to cointegration," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing Limited, vol. 5(3), pages 194-214, September.
    • Handle: RePEc:eme:jcefts:v:5:y:2012:i:3:p:194-214
    DOI: 10.1108/17544401211263964
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    Cited by:

    1. Evans, Olaniyi, 2013. "Testing Finance-Led, Export-Led and Import-Led Growth Hypotheses on Four Sub-Saharan African Economies," MPRA Paper 52460, University Library of Munich, Germany.
    2. Tsangyao Chang & Beatrice D. Simo-Kengne & Rangan Gupta, 2013. "The causal relationship between exports and economic growth in the nine provinces of South Africa: evidence from panel-Granger causality test," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 6(3), pages 296-310.
    3. P. K. Mishra, 2012. "The Dynamics of the Relationship between Imports and Economic Growth in India," South Asian Journal of Macroeconomics and Public Finance, , vol. 1(1), pages 57-79, June.
    4. Rony Masud & Jihan Binte Enam, 2023. "Consideration of the impact of the transition from a cash crop economy on the carbon footprint," Technology audit and production reserves, PC TECHNOLOGY CENTER, vol. 4(4(72)), pages 40-54, August.
    5. Ambar, Rabnawaz, 2015. "Corruption, Inequality and Economic Growth," MPRA Paper 70375, University Library of Munich, Germany, revised 2015.

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    More about this item

    Keywords

    Imports; Economic growth; National economy; Autoregressive distributed lag model;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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