Linear and Nonlinear Causal Linkages Between Exports and Growth in Next Eleven Economies

Although a plethora of literature has shed light on the export-growth nexus over the past few decades, most studies have maintained the assumption of linear symmet- ric causal linkages. The current research contributes to the existing literature by inves- tigating the export-growth linear and nonlinear causal relationships in Next Eleven emerging economies during the period 1960–2020. The empirical analysis is based on the Toda-Yamamoto linear causality test and the Kyrtsou-Labys nonlinear sym- metric and asymmetric causality tests. The Toda-Yamamoto linear causality test sug- gests little evidence of significant causal relationships between exports and growth. According to the symmetric version of the Kyrtsou-Labys nonlinear causality test, the export-led growth hypothesis holds for only four countries, while the growth-led exports hypothesis is valid for five countries. When using the asymmetric version of the Kyrtsou-Labys nonlinear causality test, the obtained findings, albeit mixed, provide fresh insights into the relationship between exports and growth. The analy- sis particularly reveals that exports and growth are more sensitive to negative than positive shocks.