IDEAS home Printed from https://ideas.repec.org/p/bgu/wpaper/134.html
   My bibliography  Save this paper

The Validity of the ELG Hypothesis in the MENA Region: Cointegration and Error Correction Model Analysis

Author

Listed:
  • Aamer Abu-Qarn

    (Department of Economics, Ben-Gurion University of the Negev)

  • Suleiman Abu-Bader

    (Department of Economics, Ben-Gurion University of the Negev)

Abstract

The paper examines the export-led growth (ELG) hypothesis for nine Middle East and North Africa (MENA) countries in three-variable vector autoregressive and error correction models. When considering total exports, our results reject the ELG hypothesis in almost all of these countries. When we examine only manufactured exports, we find no support for ELG in countries with relatively low shares of manufactured exports in total merchandise exports but strong support in countries with relatively high shares. These findings suggest that promoting exports may contribute to economic growth only after a certain threshold of manufactured exports has been reached.

Suggested Citation

  • Aamer Abu-Qarn & Suleiman Abu-Bader, 2001. "The Validity of the ELG Hypothesis in the MENA Region: Cointegration and Error Correction Model Analysis," Working Papers 134, Ben-Gurion University of the Negev, Department of Economics.
  • Handle: RePEc:bgu:wpaper:134
    as

    Download full text from publisher

    File URL: http://in.bgu.ac.il/en/humsos/Econ/Working/134.pdf
    File Function: First version, 2001
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Judith Giles & Cara Williams, 2001. "Export-led growth: a survey of the empirical literature and some non-causality results. Part 2," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 9(4), pages 445-470.
    2. Toda, Hiro Y & Phillips, Peter C B, 1993. "Vector Autoregressions and Causality," Econometrica, Econometric Society, vol. 61(6), pages 1367-1393, November.
    3. John Y. Campbell & Pierre Perron, 1991. "Pitfalls and Opportunities: What Macroeconomists Should Know about Unit Roots," NBER Chapters, in: NBER Macroeconomics Annual 1991, Volume 6, pages 141-220, National Bureau of Economic Research, Inc.
    4. Serletis, Apostolos, 1992. "Export growth and Canadian economic development," Journal of Development Economics, Elsevier, vol. 38(1), pages 133-145, January.
    5. Kravis, Irving B, 1970. "Trade as a Handmaiden of Growth: Similarities between the Nineteenth and Twentieth Centuries," Economic Journal, Royal Economic Society, vol. 80(323), pages 850-872, December.
    6. Balassa, Bela, 1978. "Exports and economic growth : Further evidence," Journal of Development Economics, Elsevier, vol. 5(2), pages 181-189, June.
    7. Bodman, Philip M, 1996. "On Export-Led Growth in Australia and Canada: Cointegration, Causality and Structural Stability," Australian Economic Papers, Wiley Blackwell, vol. 35(67), pages 282-299, December.
    8. Bagala Biswal & Urvashi Dhawan, 1998. "Export-led growth hypothesis: cointegration and causality analysis for Taiwan," Applied Economics Letters, Taylor & Francis Journals, vol. 5(11), pages 699-701.
    9. Marin, Dalia, 1992. "Is the Export-Led.Growth Hypothesis Valid for Industrialized Countries?," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 678-688, November.
    10. Riezman, Raymond G & Whiteman, Charles H & Summers, Peter M, 1996. "The Engine of Growth or Its Handmaiden? A Time-Series Assessment of Export-Led Growth," Empirical Economics, Springer, vol. 21(1), pages 77-110.
    11. Judith Giles & Cara Williams, 2001. "Export-led growth: a survey of the empirical literature and some non-causality results. Part 1," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 9(3), pages 261-337.
    12. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    13. Jung, Woo S. & Marshall, Peyton J., 1985. "Exports, growth and causality in developing countries," Journal of Development Economics, Elsevier, vol. 18(1), pages 1-12.
    14. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    15. Chow, Peter C. Y., 1987. "Causality between export growth and industrial development : Empirial evidence from the NICs," Journal of Development Economics, Elsevier, vol. 26(1), pages 55-63, June.
    16. Granger, C. W. J., 1988. "Some recent development in a concept of causality," Journal of Econometrics, Elsevier, vol. 39(1-2), pages 199-211.
    17. Feder, Gershon, 1983. "On exports and economic growth," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 59-73.
    18. 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.
    19. Prebisch, Raúl, 1950. "The economic development of Latin America and its principal problems," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 29973, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    20. Kormendi, Roger C. & Meguire, Philip G., 1985. "Macroeconomic determinants of growth: Cross-country evidence," Journal of Monetary Economics, Elsevier, vol. 16(2), pages 141-163, September.
    21. Granger, Clive W J, 1986. "Developments in the Study of Cointegrated Economic Variables," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 48(3), pages 213-228, August.
    22. Xu, Zhenhui, 1996. "On the Causality between Export Growth and GDP Growth: An Empirical Reinvestigation," Review of International Economics, Wiley Blackwell, vol. 4(2), pages 172-184, June.
    23. Sims, Christopher A, 1972. "Money, Income, and Causality," American Economic Review, American Economic Association, vol. 62(4), pages 540-552, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Asmawi Hashim & Norimah Rambeli & Norasibah Abdul Jalil & Normala Zulkifli & Emilda Hashim & Noor Al-Huda Abdul Karim, 2019. "Does Export Led Growth Hypothesis Hold Under World Crisis Recovery Regime in Malaysia?," Research in World Economy, Research in World Economy, Sciedu Press, vol. 10(5), pages 9-19, December.
    2. Christian Dreger & Dierk Herzer, 2013. "A further examination of the export-led growth hypothesis," Empirical Economics, Springer, vol. 45(1), pages 39-60, August.
    3. Judith Giles & Cara Williams, 2001. "Export-led growth: a survey of the empirical literature and some non-causality results. Part 2," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 9(4), pages 445-470.
    4. Jordan Shan & Fiona Sun, 1998. "On the export-led growth hypothesis for the little dragons: An empirical reinvestigation," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 26(4), pages 353-371, December.
    5. Yong Glasure & Aie-Rie Lee, 1999. "The export-led growth hypothesis: The role of the exchange rate, money, and government expenditure from Korea," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 27(3), pages 260-272, September.
    6. AKBAR Mohammad & NAQVI Zareen Fatima, 2010. "Are Exports an Engine of Growth in Pakistan?," EcoMod2003 330700004, EcoMod.
    7. Sayef Bakari, 2017. "The Impact of Vegetables Exports on Economic Growth in Tunisia," Economic Research Guardian, Weissberg Publishing, vol. 7(2), pages 72-87, December.
    8. Abhijit Sharma & Theodore Panagiotidis, 2003. "An Analysis of Exports and Growth in India: Some Empirical Evidence (1971-2001)," Working Papers 2003004, The University of Sheffield, Department of Economics, revised Nov 2003.
    9. Nasim Shah Shirazi & Turkhan Ali Abdul Manap, 2005. "Export-Led Growth Hypothesis: Further Econometric Evidence From South Asia," The Developing Economies, Institute of Developing Economies, vol. 43(4), pages 472-488, December.
    10. Nasim Shah Shirazi & Turkhan Ali Abdul Manap, 2004. "Exports and Economic Growth Nexus: The Case of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 43(4), pages 563-581.
    11. Love, Jim & Chandra, Ramesh, 2005. "Testing export-led growth in Bangladesh in a multivarate VAR framework," Journal of Asian Economics, Elsevier, vol. 15(6), pages 1155-1168, January.
    12. P. J. Dawson, 2005. "The export-income relationship: the case of India," Progress in Development Studies, , vol. 5(1), pages 16-29, January.
    13. Ioanna Konstantakopoulou, 2016. "New evidence on the Export-led-growth hypothesis in the Southern Euro-zone countries (1960-2014)," Economics Bulletin, AccessEcon, vol. 36(1), pages 429-439.
    14. Tarlok Singh, 2010. "Does International Trade Cause Economic Growth? A Survey," The World Economy, Wiley Blackwell, vol. 33(11), pages 1517-1564, November.
    15. Khalafalla, Khalid Yousif & Webb, Alan J., 2000. "Exports And Economic Growth Under Structural Change: A Co-Integration Analysis Of Evidence From Malaysia," Working Papers 14595, International Agricultural Trade Research Consortium.
    16. Abo-Zaid Salem M, 2011. "The Trade-Growth Relationship in Israel Revisited: Evidence from Annual Data, 1960-2004," Review of Middle East Economics and Finance, De Gruyter, vol. 6(3), pages 63-93, February.
    17. Harrison, Ann & Rodríguez-Clare, Andrés, 2010. "Trade, Foreign Investment, and Industrial Policy for Developing Countries," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4039-4214, Elsevier.
    18. AfDB AfDB, 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 2210, African Development Bank.
    19. Ahdi N. Ajmi & Goodness C. Aye & Mehmet Balcilar & Rangan Gupta, 2015. "Causality between exports and economic growth in South Africa: evidence from linear and nonlinear tests," Journal of Developing Areas, Tennessee State University, College of Business, vol. 49(2), pages 163-181, April-Jun.
    20. Ritu Rani & Naresh Kumar, 2018. "Is There an Export- or Import-led Growth in BRICS Countries? An Empirical Investigation," Jindal Journal of Business Research, , vol. 7(1), pages 13-23, June.

    More about this item

    Keywords

    ELG; MENA; Middle East and North Africa; economic growth; export promotion; Granger causality; cointegration; error correction model;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • 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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bgu:wpaper:134. 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: . General contact details of provider: https://edirc.repec.org/data/edbguil.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Aamer Abu-Qarn (email available below). General contact details of provider: https://edirc.repec.org/data/edbguil.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.