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Working Paper 76 - Are Exports the Engine of Economic Growth? An Application of Cointegration and Causality Analysis for Egypt, 1977 - 2003

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Abstract

The paper examines the export-led growth (ELG) paradigm for Egypt, using historical data from 1977 to 2003. During this period, Egypt changed its economic philosophy from central planning and government intervention to one based on a free market economy. The paper employs a variety of analytical tools, including cointegration analysis, Granger causality tests, and unit root tests, coupled with vector auto regression (VAR) and impulse response function (IRF) analyses. The paper sets three hypotheses for testing the ELG paradigm for Egypt, (i) whether GDP, exports and imports are cointegrated, (ii) whether exports Granger cause growth, (iii) whether exports Granger cause investment. The paper fails to reject the first two hypotheses, while it fails to accept that exports Granger cause investment. In addition to the analysis of the 1977-2003 period, the paper looks briefly also at the impact of the economic reform undertaken in 1991, and weather the ELG hypothesis still holds during the 1991-2003 sub-period.

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  • Fouad Abou-Stait, 2005. "Working Paper 76 - Are Exports the Engine of Economic Growth? An Application of Cointegration and Causality Analysis for Egypt, 1977 - 2003," Working Paper Series 211, African Development Bank.
    • Handle: RePEc:adb:adbwps:211
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    1. Jesús Crespo Cuaresma & Julia Wörz, 2005. "On Export Composition and Growth," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(1), pages 33-49, April.
    2. Hanaa Kheir-El-Din & Sherine El-Shawarby, 2000. "Trade and Foreign Exchange Regime in Egypt," Working Papers 2034, Economic Research Forum, revised 11 Sep 2000.
    3. Francisco L. Rivera-Batiz & Luis A. Rivera-Batiz, 2018. "Economic Integration and Endogenous Growth," World Scientific Book Chapters, in: Francisco L Rivera-Batiz & Luis A Rivera-Batiz (ed.), International Trade, Capital Flows and Economic Development, chapter 1, pages 3-32, World Scientific Publishing Co. Pte. Ltd..
    4. Bahmani-Oskooee, Mohsen & Mohtadi, Hamid & Shabsigh, Ghiath, 1991. "Exports, growth and causality in LDCs : A re-examination," Journal of Development Economics, Elsevier, vol. 36(2), pages 405-415, October.
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    3. Sunde Tafirenyika & Cyril Ayetuoma Ogbokor, 2018. "The Effect of Exports in Sacu Countries: An Empirical Analysis Using Panel Data," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 14(5), pages 34-47, OCTOBER.
    4. Khan, Haider A., 2011. "Human development and capabilities in MENA economies with special emphasis on Egypt," MPRA Paper 39381, University Library of Munich, Germany.
    5. Muhammad Shahbaz & Pervaz Azim & Khalil Ahmad, 2011. "Exports-Led Growth Hypothesis in Pakistan: Further Evidence," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 1(3), pages 182-197.
    6. Nyoni, Thabani, 2019. "Exports and imports in Zimbabwe: recent insights from artificial neural networks," MPRA Paper 96906, University Library of Munich, Germany.
    7. Athanasia Stylianou Kalaitzi & Trevor William Chamberlain, 2020. "Fuel-Mining Exports and Growth in a Developing State: The Case of the UAE," International Journal of Energy Economics and Policy, Econjournals, vol. 10(4), pages 300-308.
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    9. Ansari, S. A. & Khan, W., 2018. "Relevance of Declining Agriculture in Economic Development of South Asian Countries: An Empirical Analysis," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 10(2).
    10. Kalaitzi, Athanasia S. & Chamberlain, Trevor W., 2020. "Merchandise exports and economic growth: multivariate time series analysis for the United Arab Emirates," LSE Research Online Documents on Economics 103781, London School of Economics and Political Science, LSE Library.
    11. Nevine Eid, 2006. "FDI-Growth Relationship: Is Financial Deepening a Pre-condition," EcoMod2006 272100023, EcoMod.
    12. Kalaitzi, Athanasia Stylianou & Chamberlain, Trevor William, 2020. "Fuel-mining exports and growth in a developing state: the case of the UAE," LSE Research Online Documents on Economics 105207, London School of Economics and Political Science, LSE Library.
    13. Adusei Poku, Eugene & Broni-Pinkrah, Samuel & Effah Nyamekye, Gabriel, 2016. "Modelling and assessment of the effect of income on service exports in Ghana," MPRA Paper 72312, University Library of Munich, Germany.
    14. Athanasia S. Kalaitzi & Emmanuel Cleeve, 2018. "Export-led growth in the UAE: multivariate causality between primary exports, manufactured exports and economic growth," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 8(3), pages 341-365, September.
    15. Yifru, Tigist, "undated". "Impact Of Agricultural Exports On Economic Growth In Ethiopia: The Case Of Coffee, Oilseed And Pulses," Research Theses 265676, Collaborative Masters Program in Agricultural and Applied Economics.
    16. Yifru, Tigist, 2015. "Impact of Agricultural Exports on Economic Growth in Ethiopia: The Case of Coffee, Oilseed and Pulses," Research Theses 243473, Collaborative Masters Program in Agricultural and Applied Economics.
    17. Njimanted, Godfrey Forgha & Nkwetta Ajong Aquilas, 2015. "The Impact of Timber Exports on Economic Growth in Cameroon: An Econometric Investigation," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 3(3), pages 46-60, September.
    18. Andre C Jordaan & Joel Hinaunye Eita, 2007. "Export And Economic Growth In Namibia: A Granger Causality Analysis," South African Journal of Economics, Economic Society of South Africa, vol. 75(3), pages 540-547, September.
    19. Alimi, Santos R. & Muse, Bernard O., 2012. "Export - led growth or growth – driven exports? Evidence from Nigeria," MPRA Paper 53468, University Library of Munich, Germany.
    20. Nevine Mokhtar Eid, 2008. "Financial Development: A Pre-Condition for Foreign Direct Spillover Effects in Egypt," Working Papers 12, The German University in Cairo, Faculty of Management Technology.
    21. Neveen M. TORAYEH, 2011. "Manufactured Exports And Economic Growth In Egypt: Cointegration And Causality Analysis," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 11(1).
    22. Bakari, Sayef & Mabrouki, Mohamed, 2018. "The Impact of Agricultural Trade on Economic Growth in North Africa: Econometric Analysis by Static Gravity Model," MPRA Paper 85116, University Library of Munich, Germany.
    23. N.M. GATAWA & Yusuf U. DANTAMA & Mohammed Bello SANI, 2017. "Impact of export incentive schemes on the performance of agricultural exports in Nigeria," Journal of Economics Bibliography, KSP Journals, vol. 4(4), pages 328-334, December.
    24. Helmi Hamdi, 2013. "Testing export-led growth in Tunisia and Morocco: New evidence using the Toda and Yamamoto procedure," Economics Bulletin, AccessEcon, vol. 33(1), pages 677-686.

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