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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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    Cited by:

    1. Helmi Hamdi & Rashid Sbia & Hakimi Abdelaziz & Wafa Khlaifia hakimi, 2013. "Multivariate Granger causality between foreign direct investment and economic growth in Tunisia," Economics Bulletin, AccessEcon, vol. 33(2), pages 1193-1203.
    2. Alper Aslan & Ebru Topcu, 2018. "The Relationship between Export and Growth: Panel Data Evidence from Turkish Sectors," Economies, MDPI, Open Access Journal, vol. 6(2), pages 1-15, April.
    3. Nasri Harb, 2009. "Oil Exports, Non‐Oil GDP, and Investment in the GCC Countries," Review of Development Economics, Wiley Blackwell, vol. 13(4), pages 695-708, November.
    4. Boriss Siliverstovs & Dierk Herzer, 2006. "Export-led growth hypothesis: evidence for Chile," Applied Economics Letters, Taylor & Francis Journals, vol. 13(5), pages 319-324.
    5. Dierk HERZER & Felicitas NOWAK‐LEHMANN D. & Boriss SILIVERSTOVS, 2006. "Export‐Led Growth In Chile: Assessing The Role Of Export Composition In Productivity Growth," The Developing Economies, Institute of Developing Economies, vol. 44(3), pages 306-328, September.
    6. Abu-Bader, Suleiman & Abu-Qarn, Aamer, 2005. "Financial Development and Economic Growth: Time Series Evidence from Egypt," MPRA Paper 1113, University Library of Munich, Germany.
    7. Seyyed Jafar Zonoozi & Soghra Rezai Nasab, 2015. "Assessment of Herbal Extract Industry in West Azerbaijan Province," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(7), pages 947-958, July.
    8. Abu-Bader, Suleiman & Abu-Qarn, Aamer, 2005. "Financial Development and Economic Growth: Time Series Evidence from Egypt," MPRA Paper 1113, University Library of Munich, Germany.
    9. Teboho Jeremiah Mosikari & Mmamontsho Charlotte Senosi & Joel Hinaunye Eita, 2016. "Manufactured exports and economic growth in Southern African Development Community (SADC) region: A panel cointegration approach," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 12(5), pages 266-278, OCTOBER.
    10. Christian Dreger & Dierk Herzer, 2013. "A further examination of the export-led growth hypothesis," Empirical Economics, Springer, vol. 45(1), pages 39-60, August.
    11. Nayef ALSHAMMARI & Hanouf ALDHAFEERI, 2020. "Patterns Of Industrial Development In An Oil-Based Economy: Kuwait 2000-2015," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 20(1), pages 117-128.
    12. Sadorsky, Perry, 2011. "Trade and energy consumption in the Middle East," Energy Economics, Elsevier, vol. 33(5), pages 739-749, September.
    13. NguyenHuu, Tams & Karaman Örsal, Deniz Dilan, 2020. "A new and benign hegemon on the horizon? The Chinese century and growth in the Global South," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 14, pages 1-35.
    14. Saten Kumar, 2011. "Estimating export demand equations in selected Asian countries," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 4(1), pages 5-16, February.
    15. Ricardo Azevedo Araujo & Joanílio Rodolpho Teixeira & Cristiane Soares, 2015. "Export-led growth vs growth-led exports: what matters for the Brazilian growth experience after trade liberalization?," Review of Keynesian Economics, Edward Elgar Publishing, vol. 3(1), pages 108-128, January.
    16. Sheila Amin Gutierrez de Pineres, 2006. "What a difference a source makes! An analysis of export data," Applied Economics Letters, Taylor & Francis Journals, vol. 13(1), pages 35-39.
    17. Boriss Siliverstovs & Dierk Herzer, 2007. "Manufacturing exports, mining exports and growth: cointegration and causality analysis for Chile (1960-2001)," Applied Economics, Taylor & Francis Journals, vol. 39(2), pages 153-167.
    18. 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.
    19. 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.
    20. Dizaji, S.F., 2012. "Exports, government size and economic growth (Evidence from Iran as a developing oil-export based economy)," ISS Working Papers - General Series 535, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    21. Shivneil Kumar Raj & Priteshni Pratibha Chand, 2017. "Analysis of Fiji’s Export and Its Impact on Economic Growth," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 7(4), pages 1-14, April.
    22. 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.
    23. Salah Abosedra & Chor Foon Tang, 2019. "Are exports a reliable source of economic growth in MENA countries? New evidence from the rolling Granger causality method," Empirical Economics, Springer, vol. 56(3), pages 831-841, March.
    24. 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).
    25. Husein, J, 2010. "Export-Led Growth Hypothesis In The Mena Region: A Multivariate Cointegration, Causality And Stability Analysis," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 10(2).

    More about this item

    Keywords

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

    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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