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Export-Led Growth: A Survey of the Empirical Literature and Some Noncausality Results, Part 1

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  • Judith A. Giles

    ()

  • Cara L. Williams

Abstract

The economic development and growth literature contains extensive discussions on relationships between exports and economic growth. One debate centers on whether countries should promote the export sector to obtain economic growth. An abundant empirical literature on this export-led growth (ELG) hypothesis has followed. We contribute to this literature in two ways. In this paper, part 1, we provide a comprehensive survey of more than one hundred and fifty export-growth applied papers. We describe the changes that have occurred, over the last two decades, in the methodologies used to empirically examine for relationships between exports and economic growth, and we provide information on the current findings. The last decade has seen an abundance of time series studies that focus on examining for causality via exclusions restrictions tests, impulse response function analysis and forecast error variance decompositions. Our second contribution is to examine some of these time series methods. We show, in part 2, that ELG results based on standard causality techniques are not typically robust to specification or method. We do this by reconsidering two export-led growth applications - Oxley's (1993) study for Portugal, and Henriques and Sadorsky's (1996) analysis for Canada. Our results suggest that extreme care should be exercised when interpreting much of the applied research on the ELG hypothesis.

Suggested Citation

  • Judith A. Giles & Cara L. Williams, 2000. "Export-Led Growth: A Survey of the Empirical Literature and Some Noncausality Results, Part 1," Econometrics Working Papers 0001, Department of Economics, University of Victoria.
  • Handle: RePEc:vic:vicewp:0001
    Note: ISSN 1485-6441
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    References listed on IDEAS

    as
    1. A. Warne, 1996. "Causality in Nonlinear Models," SFB 373 Discussion Papers 1996,26, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    2. Judith A. Giles & Sadaf Mirza, 1999. "Some Pretesting Issues on Testing for Granger Noncausality," Econometrics Working Papers 9914, Department of Economics, University of Victoria.
    3. Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501.
    4. Prebisch, Raúl, 1950. "The economic development of Latin America and its principal problems," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 29973, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    5. Peter C.B. Phillips, 1994. "Nonstationary Time Series and Cointegration: Recent Books and Themes for the Future," Cowles Foundation Discussion Papers 1081, Cowles Foundation for Research in Economics, Yale University.
    6. Hansen, B.E., 1990. "A Powerful, Simple Test For Cointegration Using Cochrane- Orcutt," RCER Working Papers 230, University of Rochester - Center for Economic Research (RCER).
    7. Christopher Findlay & Andrew Watson, 1996. "Economic Growth and Trade Dependency in China," Chinese Economies Research Centre (CERC) Working Papers 1996-05, University of Adelaide, Chinese Economies Research Centre.
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    More about this item

    Keywords

    economic growth; export promotion; causality; time series models; cointegration; innovation accounting.;

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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