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The Export-Output Relationship in South Africa: An Empirical Investigation


  • Paul Cipamba Wa Cipamba


This study re-investigates the empirical relationship between exports and economic growth in South Africa using econometric techniques of co-integration and Granger causality over the period 1970Q1-2012Q4. The Johansen approach of co-integration shows that exports and GDP evolved together overtime, though deviations from the steady state might happen in the short-run. Furthermore, Granger causality based on a Vector Error Correction model (VECM) reveals the existence of short and long run bi-directional causality between export and GDP growth. Similarly, Granger causality based on an augmented vector auto-regression (VAR) model confirms that export Granger causes GDP and vice versa. Overall, the empirical findings of this study support the validity of export-led growth and growth –driven export hypothesizes in the case of South Africa. The main policy implication of these results is that a speedy and sound execution of government’s plans aimed at stimulating and diversifying production for export will contribute to the improvement of growth and employment prospects.

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  • Paul Cipamba Wa Cipamba, 2013. "The Export-Output Relationship in South Africa: An Empirical Investigation," Working Papers 355, Economic Research Southern Africa.
  • Handle: RePEc:rza:wpaper:355

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    References listed on IDEAS

    1. Carmen M. Reinhart & Ioannis Tokatlidis, 2003. "Financial Liberalisation: The African Experience," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 12(Supplemen), pages 53-88, September.
    2. Alexander Zimper, 2013. "Optimal Liquidity Provision Through a Demand Deposit Scheme: The Jacklin Critique Revisited," German Economic Review, Verein für Socialpolitik, vol. 14(1), pages 89-107, February.
    3. Olu Ajakaiye & Mthuli Ncube & Jacqueline Macakiage, 0. "Services and Economic Development in Africa: An Overview," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 16(suppl_1), pages -12.
    4. Zimper Alexander, 2006. "Assessing the Likelihood of Panic-Based Bank Runs," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 6(1), pages 1-19, December.
    5. Eichberger, Jurgen & Harper, Ian R., 1997. "Financial Economics," OUP Catalogue, Oxford University Press, number 9780198775409.
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    Export-led growth; Granger causality; South Africa;

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