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Empirical Re-Investigation into the Export-Led Growth Hypothesis (ELGH): Evidence from EAC and SADC Economies

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  • Ojo Johnson Adelakun

    (Economics Department, School of Accounting, Economics & Finance, CLMS, University of KwaZulu-Natal, Westville Campus, Durban P.M.B. 4000, South Africa
    Department of Economics, Faculty of Social Sciences, National University of Lesotho, Roma P.O. Box 180, Lesotho)

  • Oluwafemi Opeyemi Ojo

    (AdelakunOJ ECOMOD Laboratory, Ikeja, Lagos P.O. Box 9361, Nigeria
    Export Department, Dangote Cement Plc. Leadway Marble House, Lagos 106104, Nigeria)

  • Sakhile Mpungose

    (Economics Department, School of Accounting, Economics & Finance, CLMS, University of KwaZulu-Natal, Westville Campus, Durban P.M.B. 4000, South Africa)

Abstract

The Export-Led Growth Hypothesis (ELGH) posits that expanding exports drive long-run economic growth. While this has held true for several Asian economies, its effectiveness across African regional blocs remains underexplored. This study investigates the validity of ELGH in the East African Community (EAC) and Southern African Development Community (SADC), assessing whether exports significantly contribute to economic growth in these regions. The analysis covers 22 EAC and SADC economies from 1990 to 2022—regions marked by structural transformation efforts, trade liberalisation, and participation in the AfCFTA. A dynamic panel data model based on an augmented Cobb-Douglas production function is estimated using the System Generalised Method of Moments (System GMM) to address endogeneity and reverse causality. Granger causality tests supplement the analysis. Exports and technology significantly enhance GDP growth, while labour and FDI are statistically insignificant. Trade openness negatively affects growth, suggesting vulnerability to external shocks. A bidirectional Granger causality exists between exports and GDP. This study offers the first dynamic, bloc-level empirical evaluation of ELGH across EAC and SADC, incorporating trade-related interactions. Findings affirm ELGH’s relevance and stress the need for export diversification, technological upgrading, and institutional reform for sustained growth in Africa.

Suggested Citation

  • Ojo Johnson Adelakun & Oluwafemi Opeyemi Ojo & Sakhile Mpungose, 2025. "Empirical Re-Investigation into the Export-Led Growth Hypothesis (ELGH): Evidence from EAC and SADC Economies," Economies, MDPI, vol. 13(6), pages 1-23, June.
    • Handle: RePEc:gam:jecomi:v:13:y:2025:i:6:p:175-:d:1680038
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