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

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  • Abu-Qarn, Aamer
  • Abu-Bader, Suleiman

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

  • Abu-Qarn, Aamer & Abu-Bader, Suleiman, 2001. "The Validity of the ELG Hypothesis in the MENA Region: Cointegration and Error Correction Model Analysis," MPRA Paper 1116, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:1116
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    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
    • 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
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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