Testing Finance-Led, Export-Led and Import-Led Growth Hypotheses on Four Sub-Saharan African Economies
This study carries out an empirical examination of the finance-led, export-led and import-led growth hypothesis for four of the largest Sub-Saharan African economies namely South Africa, Nigeria, Ghana and Kenya. Within a multivariate Vector-Auto Regressive (VAR) framework, the concept of Granger causality is employed to determine the direction of causation between exports and output, duly taking into account the stationarity properties of the time series data. With further substantiation from impulse response function and variance decomposition, the empirical evidence shows (i) finance-led, export-led and import-led growth in South Africa and Kenya, (ii) finance-led and imports-led growth in Nigeria, and (iii) only finance-led growth in Ghana. These four Sub-Saharan African nations, with the help of reforms, have experienced expanding exports, increased financial development and accelerated GDP growth rates. Yet, these have yielded varying degrees of success. The agenda for economic growth is a long one in Sub-Saharan Africa. Reforms would require preconditions in the wider economic and political environment, without which they will be ineffective or even counterproductive.
|Date of creation:||Dec 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michaely, Michael, 1977. "Exports and growth : An empirical investigation," Journal of Development Economics, Elsevier, vol. 4(1), pages 49-53, February.
- Shahbaz, Muhammad, 2012.
"Does trade openness affect long run growth? Cointegration, causality and forecast error variance decomposition tests for Pakistan,"
Elsevier, vol. 29(6), pages 2325-2339.
- Muhammad, Shahbaz, 2012. "Does Trade Openness Affect Long Run Growth? Cointegration, Causality and Forecast Error Variance Decomposition Tests for Pakistan," MPRA Paper 37391, University Library of Munich, Germany, revised 10 Mar 2012.
- Johansen, S., 1991.
"Determination of Cointegration Rank in the Presence of a Linear Trend,"
76a, Helsinki - Department of Economics.
- Johansen, Soren, 1992. "Determination of Cointegration Rank in the Presence of a Linear Trend," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 383-97, August.
- repec:eme:jcefts:v:5:y:2012:i:3:pp:194-214 is not listed on IDEAS
- Islam, Faridul & Adnan Hye, Qazi Muhammad & Shahbaz, Muhammad, 2011.
"Imports-economic growth nexus: ARDL approach to cointegration,"
28462, University Library of Munich, Germany.
- Faridul Islam & Qazi Muhammad Adnan Hye & Muhammad Shahbaz, 2012. "Import-economic growth nexus: ARDL approach to cointegration," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 5(3), pages 194-214, December.
- Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
- Awokuse, Titus O., 2007. "Causality between exports, imports, and economic growth: Evidence from transition economies," Economics Letters, Elsevier, vol. 94(3), pages 389-395, March.
- 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 678-88, November.
- Marin, Dalia, 1992. "Is the Export-led Growth Hypothesis Valid for Industrialized Countries?," Munich Reprints in Economics 3112, University of Munich, Department of Economics.
- Marin, Dalia, 1990. "Is the Export-Led Growth Hypothesis Valid for Industrialized Countries?," CEPR Discussion Papers 362, C.E.P.R. Discussion Papers.
- Gries, Thomas & Kraft, Manfred & Meierrieks, Daniel, 2009.
"Linkages Between Financial Deepening, Trade Openness, and Economic Development: Causality Evidence from Sub-Saharan Africa,"
Elsevier, vol. 37(12), pages 1849-1860, December.
- Thomas Gries & Manfred Kraft & Daniel Meierrieks, 2008. "Linkages between Financial Deepening,Trade Openness and Economic Development: Causality Evidence from Sub-Saharan Africa," Working Papers CIE 15, University of Paderborn, CIE Center for International Economics.
- Barbara Pistoresi & Alberto Rinaldi, 2010. "Exports,growth and causality. New evidence on Italy: 1863-2004," Department of Economics 0633, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
- Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
- Riezman, R.G. & Summers, P.M. & Whiteman, C.H., 1991.
"The Engine of Growth or Its Handmaiden? A Time Series Assessment of Export-Led Growth,"
92-27, University of Iowa, Department of Economics.
- 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.
- Raymond Riezman & Charles Whiteman & Peter M. Summers, 1996. "The Engine of Growth or Its Handmaiden? A Time-Series Assessment of Export-Led Growth," GE, Growth, Math methods 9602002, EconWPA.
- Riezman, R. & Whiteman, C. & Summers, P.M., 1995. "The Engine of Growth or Its Handmaiden? A Time Series Assessment of Export-Led Growth," Working Papers 95-16, University of Iowa, Department of Economics.
- Ramos, Francisco F. Ribeiro, 2001. "Exports, imports, and economic growth in Portugal: evidence from causality and cointegration analysis," Economic Modelling, Elsevier, vol. 18(4), pages 613-623, December.
- Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:52460. 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: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.