Exports, imports and economic growth in South Korea and Japan: a tale of two economies
This article investigates the relationship between exports, imports and economic growth for South Korea and Japan by constructing a Vector Autoregression (VAR) model. Causality is examined between real Gross Domestic Product (GDP), real exports and real imports. Several principal results emerge from the empirical work. First, the three variables are cointegrated for both countries, implying that a long run steady state exists. Second, there is evidence of bidirectional causality between imports and economic growth for both countries. Finally, Japan seems to experience export-led growth, while GDP growth in South Korea has a negative effect on export growth. These contrasting findings could result from export goods in Japan exhibiting greater nonprice competitive aspects, although their success fails to trigger a virtuous circle since growth fails to lead to increased exports, while for South Korea, output growth leads to a decrease in export growth suggesting a strong domestic market.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 44 (2012)
Issue (Month): 3 (January)
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAEC20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAEC20|
When requesting a correction, please mention this item's handle: RePEc:taf:applec:44:y:2012:i:3:p:361-372. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.