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A revisitation of the export-led growth hypothesis in Malaysia using the leveraged bootstrap simulation and rolling causality techniques


  • Chor Foon Tang


According to the neoclassical growth theory, export expansion could stimulate economic growth because it promotes specialisation and raises factor productivity. Thus, many developing countries depend heavily on export-orientated businesses to accelerate economic growth. Nevertheless, the causality evidences on the export-led growth hypothesis remain elusive and controversial. Two primary empirical questions emerged in the international trade and development literatures are: (a) Does the export-led growth hypothesis still valid? (b) Why causality evidences are inconsistent among studies? In light of these, the present study attempts to contribute to the export-led growth literature by using the Malaysian data set. This study covers the monthly data set from January 1975 to August 2010. To achieve the objectives of this study, we employ the leveraged bootstrap simulation causality test and also the rolling regression-based causality tests. The leveraged bootstrap simulation causality results suggest that exports and output growth are bilateral causality in nature. However, the rolling causality results demonstrate that the causality inferences for export-led growth hypothesis are unstable over time. For this reason, policy initiative to promote exports may not always stimulate economic growth and development in Malaysia. Therefore, balancing policy is urged to ensure that the economic growth in Malaysia can be materialised.

Suggested Citation

  • Chor Foon Tang, 2013. "A revisitation of the export-led growth hypothesis in Malaysia using the leveraged bootstrap simulation and rolling causality techniques," Journal of Applied Statistics, Taylor & Francis Journals, vol. 40(11), pages 2332-2340, November.
  • Handle: RePEc:taf:japsta:v:40:y:2013:i:11:p:2332-2340
    DOI: 10.1080/02664763.2013.810195

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    Cited by:

    1. Shahbaz, Muhammad & Hussain Shahzad, Syed Jawad & Jammazi, Rania, 2016. "Nexus between U.S Energy Sources and Economic Activity: Time-Frequency and Bootstrap Rolling Window Causality Analysis," MPRA Paper 68724, University Library of Munich, Germany, revised 08 Jan 2016.
    2. Aviral Kumar Tiwari & Alexander Ludwig, 2014. "The export-led growth hypothesis for India: examining causality by a new approach in the time-frequency domain," Applied Economics Letters, Taylor & Francis Journals, vol. 21(18), pages 1297-1301, December.
    3. Tang, Chor Foon & Lai, Yew Wah & Ozturk, Ilhan, 2015. "How stable is the export-led growth hypothesis? Evidence from Asia's Four Little Dragons," Economic Modelling, Elsevier, vol. 44(C), pages 229-235.
    4. repec:eee:eneeco:v:68:y:2017:i:c:p:327-339 is not listed on IDEAS
    5. repec:eco:journ1:2017-03-59 is not listed on IDEAS

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