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Exports, Imports, and Economic Growth in South Asia: Evidence Using a Multivariate Time-series Framework

  • Musleh-Ud Din

    (Pakistan Institute of Development Economics, Islamabad.)

This paper examines the export-led growth hypothesis for the five largest economies of the South Asian region using a multivariate time-series framework. The South Asian countries present an interesting case study in view of their increasing outward orientation and adoption of export promotion policies as part of their growth strategies. A key feature of the study is the explicit incorporation of imports in the analysis to make allowance for their role in the export-economic growth relationship. While controlling for imports, the results indicate bi-directional causality between exports and output growth in Bangladesh, India, and Sri Lanka in the short-run. The study finds long-run equilibrium relationships among exports, imports, and output for Bangladesh and Pakistan. However, for India, Nepal, and Sri Lanka, no evidence of a long-run relationship among the relevant variables is found. These results are in contrast to some earlier work that found the export-led growth hypothesis to be a long-run phenomenon for all countries in the region

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Article provided by Pakistan Institute of Development Economics in its journal The Pakistan Development Review.

Volume (Year): 43 (2004)
Issue (Month): 2 ()
Pages: 105-124

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Handle: RePEc:pid:journl:v:43:y:2004:i:2:p:105-124
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