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Economic growth and the external sector: Evidence from Korea, lessons for Mexico

Author

Listed:
  • Julen Berasaluce

    (El Colegio de México)

  • José Romero

    (El Colegio de México)

Abstract

In this paper, we have set up an empirical analysis of the Korean external sector between 1980 and 2015, in order to identify the potential relationships between economic growth, exports, imports and foreign direct investment. We chose to study Korea because is a country that has been taken as a reference of the export-led growth hypothesis in order to justify export-promoting policies in Mexico. The results of our four-variable vector autoregressive model suggest that exports and foreign direct investment are not driving economic growth in Korea. Therefore, one should be cautious about policies that promote such investment and export tools to boost economic growth.

Suggested Citation

  • Julen Berasaluce & José Romero, 2017. "Economic growth and the external sector: Evidence from Korea, lessons for Mexico," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 32(1), pages 95-131.
  • Handle: RePEc:emx:esteco:v:32:y:2017:i:1:p:95-131
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Bakari, Sayef, 2017. "Why is South Africa Still a Developing Country?," MPRA Paper 80763, University Library of Munich, Germany.
    2. Sayef Bakari, 2017. "The Three-Way Linkages Between Export, Import And Economic Growth: New Evidence From Tunisia," Journal of Smart Economic Growth, , vol. 2(3), pages 13-53, December.
    3. repec:dug:journl:y:2017:i:2:p:34-43 is not listed on IDEAS
    4. Sayef Bakari, 2017. "The Relationship between Export, Import, Domestic Investment and Economic Growth in Egypt: Empirical Analysis," EuroEconomica, Danubius University of Galati, issue 2(36), pages 34-43, November.

    More about this item

    Keywords

    South Korea; VAR; industrial policy; exports; imports; FDI; growth;

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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