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The South Korean Export Benchmark: Validity of the Export-Led Growth Hypothesis

In: Economics and Finance Readings

Author

Listed:
  • Mayar Bakeer

    (The German University)

  • Hebatallah Ghoneim

    (The German University)

Abstract

The Export-led growth hypothesis has been a controversial topic and its validity has been under scrutiny even for one of its well-renounced benchmarks, South Korea. The paper explores the causal relation between exports and GDP for South Korea for a time span of 61 years. Unit root tests are implemented and the existence of structural breaks were discovered. Then a cointegration test using the Gregory–Hansen followed by an ARDL and Error correction model. The methodology emphasized the presence of a short-run causality and long-run relationship. Finally, a Toda–Yamamoto Granger causality test showed that there is a bidirectional relation between GDP and Exports. Results shed light on the importance of the shift in the type of goods exported from Light industries to Heavy Chemical industries and how that shift may have been a turning point for the South Korean Economy and the affirmation of the ELGH.

Suggested Citation

  • Mayar Bakeer & Hebatallah Ghoneim, 2023. "The South Korean Export Benchmark: Validity of the Export-Led Growth Hypothesis," Springer Books, in: Evan Lau & Rayenda Khresna Brahmana & Lee Ming Tan (ed.), Economics and Finance Readings, pages 155-179, Springer.
    • Handle: RePEc:spr:sprchp:978-981-99-1979-6_10
    DOI: 10.1007/978-981-99-1979-6_10
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    More about this item

    Keywords

    Export; Economic growth; Unit Root; Structural break; Gregory–Hansen; ARDL; ECM; Toda–Yamamoto Granger Causality; South Korea; Cointegration;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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