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Exports and growth: a causality analysis for the pulp and paper industries based on international panel data

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  • W. S. Chao
  • J. Buongiorno

Abstract

This study examines the causal relations between exports and domestic production in the pulp and paper industries. The issue is whether exports are the engine of growth, or whether exports follow growth. The data were time-series of the 15 main exporting countries between 1961 and 1995. The method was Granger-causality analysis with error correction, based on models estimated in three ways: ordinary least squares by country, least squares with dummy variables (LSDV), and seemingly unrelated regression. Regardless of method, the strongest relation was an instantaneous (within a year) feedback between exports and production. The LSDV results implied average multipliers across countries of 1.2 to 1.4 from exports to production, and 0.20 to 0.25 from production to exports, in both industries. Experiments with monthly data on the pulp industries of Canada and the USA showed that temporal aggregation could affect the Granger-causality test results.

Suggested Citation

  • W. S. Chao & J. Buongiorno, 2002. "Exports and growth: a causality analysis for the pulp and paper industries based on international panel data," Applied Economics, Taylor & Francis Journals, vol. 34(1), pages 1-13.
    • Handle: RePEc:taf:applec:v:34:y:2002:i:1:p:1-13
    DOI: 10.1080/00036840010027531
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    Cited by:

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    2. Jochen Hartwig, 2008. "Has Health Capital Formation Cured 'Baumol's Disease'? - Panel Granger Causality Evidence for OECD Countries," KOF Working papers 08-206, KOF Swiss Economic Institute, ETH Zurich.
    3. Fadiga, Mohamadou L. & Mohanty, Samarendu & Chaudhary, Jagadanand, 2003. "Price Dynamics In The U.S. Fiber Markets:Its Implications For Cotton Industry," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35071, Southern Agricultural Economics Association.
    4. Laaksonen-Craig, Susanna, 2004. "Foreign direct investments in the forest sector: implications for sustainable forest management in developed and developing countries," Forest Policy and Economics, Elsevier, vol. 6(3-4), pages 359-370, June.
    5. Trofimenko, Natalia, 2005. "Learning by Exporting: Does It Matter Where One Learns? Evidence from Colombian Manufacturing Plants," Kiel Working Papers 1262, Kiel Institute for the World Economy (IfW Kiel).
    6. Hartwig, Jochen, 2010. "Is health capital formation good for long-term economic growth? - Panel Granger-causality evidence for OECD countries," Journal of Macroeconomics, Elsevier, vol. 32(1), pages 314-325, March.

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