Main Article Content
Abstract
This study aims to investigate the export-led growth hypothesis for two developing country groups i.e. the Middle East and North African (MENA), and South Asian (SA) countries. The study uses time-series data for the period of (1990-2018) based on the unit root, cointegration, error correction modelling, and Granger causality tests. Findings/originality: The results found a long-run cointegration, but no evidence for significant relations between the variables was confirmed. Furthermore, there is no Granger causality between economic growth and exports in the two directions for the MENA countries. But for the SA countries, we note a unidirectional causality from economic growth to exports, i.e. the growth in both country groups was not driven by an export-led growth strategy. This implies that exports aren’t the cause of output growth, and Accordingly, looking for alternative factors of growth in the countries concerned can be suggested.
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References
- Abbas, S. (2012). Causality between exports and economic growth: Investigating suitable trade policy for Pakistan. Eurasian Journal of Business and Economics, 5(10), 91–98. Retrieved from https://www.ejbe.org/EJBE2012Vol05No10p91ABBAS.pdf
- Baharumshah, A. Z., & Rashid, S. (1999). Exports, imports and economic growth in Malaysia: Empirical evidence based on multivariate time series. Asian Economic Journal, 13(4), 389–406. https://doi.org/10.1111/1467-8381.00092
- Bakari, S., & Krit, M. (2017). The nexus between exports, imports and economic growth: Evidence from Mauritania. International Journal of Economics and Business Research, 5(1), 10–17. Retrieved from https://www.researchgate.net/publication/316511118
- Balassa, B. (1978). Export incentives and export performance in developing countries: A comparative analysis. Weltwirtschaftliches Archiv, 114(1), 24–61. https://doi.org/10.1007/BF02696530
- Balassa, B. (1985). Trade between developed and developing countries’: The decade ahead. OECD Economic Studies, 1(3), 7–25. Retrieved from http://documents.worldbank.org/curated/en/912591468766783462/pdf/multi-page.pdf
- Ben-david, D., & Loewy, M. B. (2008). Trade openness and economic growth: Is growth export-led or import-led? Applied Economics, 40(2), 161–173. https://doi.org/10.1080/00036840600749490
- Bhagwati, J. N. (1988). Export-promoting trade strategy: Issues and evidence. World Bank Research Observer, 3(1), 27–57. https://doi.org/10.1093/wbro/3.1.27
- Bilas, V. et el. (2015). Examining the export-led growth hypothesis: The case of Croatia. Nase Gospodarstvo/Our Economy, 61(3), 22–31. https://doi.org/10.1515/ngoe-2015-0010
- Busse, M., & Koeniger, J. (2012). Trade and economic growth: A re-examination of the empirical evidence. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2009939
- Dutt, S. D., Ghosh, D., & Austin, A. (2015). Export growth-economic growth Nexus: An empirical re-examination. Journal of Business and Economics, 6(12), 1999–2007. https://doi.org/10.15341/jbe(2155-7950)/12.06.2015/001
- Ekanayake, E. . (1999). Exports and eonomic growth in developing countries: Cointegration and error-correction models. International Advances in Economic Research, 5(1), 147–148. https://doi.org/10.1007/BF02295041
- Furuoka, F. (2007). Do exports act as “engine” of growth? Evidence from Malaysia. Economics Bulletin, 6(37), 1–14. Retrieved from https://ideas.repec.org/a/ebl/ecbull/eb-07f40023.html
- Ghatak, S., & Price, S. W. (1997). Export composition and economic growth: Cointegration and causality evidence for India. Review of World Economics, 133(3), 538–553. https://doi.org/10.1007/bf02707502
- Gokmenoglu, K. K., Sehnaz, Z., & Taspinar, N. (2015). The export-led growth: A case study of Costa Rica. Procedia Economics and Finance, 25(May), 471–477. https://doi.org/10.1016/s2212-5671(15)00759-5
- Granger, C. (1969). Investigating causal relations by econometric models and cross-spectral methods. Econometrica, 37(3), 424–438. https://doi.org/10.2307/1912791
- Gujarati, D. N. (2004). Basic econometrics. New York (4th ed.). New York: McGraw Hill. https://doi.org/10.1126/science.1186874
- Hallaert, J. J. (2006). A history of empirical literature on the relationship between trade and growth. Mondes En Developpement, 34(3), 63–77. https://doi.org/10.3917/med.135.0063
- Hamori, S. e. el. (2003). Trade and growth relationship: Some evidence from Comoros, Madagascar, Mauritius and Seychelles. Asian and African Area Studies, 3, 174–185. Retrieved from https://repository.kulib.kyoto-u.ac.jp/dspace/bitstream/2433/80018/1/aaas_3_174.pdf
- Hatemi-J, A., & Irandoust, M. (2000). Time-series evidence for Balassa’s export-led growth hypothesis. The Journal of International Trade & Economic Development, 9(3), 355–365. https://doi.org/10.1080/09638190050086195
- Huang, J., & Ramirez, M. D. (2016). Do exports lead economic output in five Asian countries? A cointegration and Granger causality analysis. Business and Economic Research, 6(2), 30. https://doi.org/10.5296/ber.v6i2.9747
- Ibrahim, M. H. (2002). An empirical note on the export-led growth hypothesis: The case of Malaysia. Economic Analysis and Policy, 32(2), 221–232. https://doi.org/10.1016/S0313-5926(02)50030-8
- Kugler, P. (1991). Growth, exports and cointegration: An empirical investigation. Review of World Economics, 127(1), 73–82. https://doi.org/10.1007/BF02707311
- Lee, C. H., & Huang, B. N. (2002). The relationship between exports and economic growth in East Asian countries: A multivariate threshold autoregressive approach. Journal of Economic Development, 27(2), 45–68. Retrieved from https://ideas.repec.org/a/jed/journl/v27y2002i2p45-68.html
- Matsane, S. H. (2010). Empirical investigation on the relationship between trade openness and gross domestic product growth rate: The case of South Africa (1980-2010). Retrieved from https://www.academia.edu/12369140/Empirical_Investigation_on_the_Relationship_between_Trade_Openness_and_Gross_Domestic_Product_Growth_Rate_The_Case_of_South_Africa_1980-2010_
- Michaely, M. (1977). Exports and growth: An empirical investigation. Journal of Development Economics, 4(1), 49–53. Retrieved from http://www.sciencedirect.com/science/article/pii/0304-3878(77)90006-2
- Narayan, P. K., Narayan, S., Prasad, B. C., & Prasad, A. (2007). Export-led growth hypothesis: Evidence from Papua New Guinea and Fiji. Journal of Economic Studies, 34(4), 341–351. https://doi.org/10.1108/01443580710826380
- Nath, H. K. (2005). Export-led growth in Bangladesh: A time series analysis. Applied Economics Letters, 12(6), 361–364. https://doi.org/10.1080/13504850500068194
- NKoro, E., & Elvin, A. (2001). Autoregressive Distributed Lag (ARDL) cointegration technique: Application and interpretation. Journal of Statistical and Econometric Methods, 5(3), 63–91. https://doi.org/10.1002/jae.616
- Noor, S. I. M., & Rambeli@Ramli, N. (2018). Impact of export, import and growth: Evidence using econometric analysis in Malaysia. International Journal of Accounting, Finance and Business, 3(16), 12–19. Retrieved from http://ijafb.com/archived.asm
- Riedel, J. (2016). Trade as the engine of growth in developing countries, revisited. The Economic Journal, 94(373), 56–73. https://doi.org/10.2307/2232215
- Rizavi, S. S., Khan, M. K., & Mustafa, S. H. (2010). Openness and growth in South Asia. A Research Journal of South Asian Studies, 25(2), 419–428. Retrieved from http://pu.edu.pk/images/journal/csas/PDF/13-Sayyid Salman Rizavi.pdf
- Rois, R., Basak, T., Rahman, M. M., & Majumder, A. K. (2012). Modified Breusch-Godfrey Test for restricted higher order autocorrelation in Dynamic Linear Model – A distance based approach. International Journal of Business and Management, 7(17), 88–97. https://doi.org/10.5539/ijbm.v7n17p88
- Ronit, M. (2014). The relationship between the growth of exports and growth of gross domestic product of India. International Journal of Business and Economics Research, 3(3), 135. https://doi.org/10.11648/j.ijber.20140303.13
- Saaed, A. A. J., & Hussain, M. A. (2015). Impact of exports and imports on economic growth: Evidence from Tunisia. Journal of Emerging Trends in Economics and Management Sciences (JETEMS), 6(1), 13–21. Retrieved from http://jetems.scholarlinkresearch.com/articles/Impact of Exports and Imports.pdf
- Samad, A. (2019). Does Export Lead Economic Growth? Or Other Way? VEC-Granger Causality Evidence from Nine South-East Asian Countries. Journal of Applied Business and Economics, 21(2), 117–128. https://doi.org/10.33423/jabe.v21i1.1459
- Sen, S. (2010). International trade theory and policy: A review of the literature (Working Paper No. 635). SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1713843
- Tyler, W. G. (1980). Growth and export expansion in developing countries (Discussion Paper No. 5). IPEA (Institute for Applied Economic Research). Retrieved from http://repositorio.ipea.gov.br/bitstream/11058/4846/1/DiscussionPaper_5.pdf
References
Abbas, S. (2012). Causality between exports and economic growth: Investigating suitable trade policy for Pakistan. Eurasian Journal of Business and Economics, 5(10), 91–98. Retrieved from https://www.ejbe.org/EJBE2012Vol05No10p91ABBAS.pdf
Baharumshah, A. Z., & Rashid, S. (1999). Exports, imports and economic growth in Malaysia: Empirical evidence based on multivariate time series. Asian Economic Journal, 13(4), 389–406. https://doi.org/10.1111/1467-8381.00092
Bakari, S., & Krit, M. (2017). The nexus between exports, imports and economic growth: Evidence from Mauritania. International Journal of Economics and Business Research, 5(1), 10–17. Retrieved from https://www.researchgate.net/publication/316511118
Balassa, B. (1978). Export incentives and export performance in developing countries: A comparative analysis. Weltwirtschaftliches Archiv, 114(1), 24–61. https://doi.org/10.1007/BF02696530
Balassa, B. (1985). Trade between developed and developing countries’: The decade ahead. OECD Economic Studies, 1(3), 7–25. Retrieved from http://documents.worldbank.org/curated/en/912591468766783462/pdf/multi-page.pdf
Ben-david, D., & Loewy, M. B. (2008). Trade openness and economic growth: Is growth export-led or import-led? Applied Economics, 40(2), 161–173. https://doi.org/10.1080/00036840600749490
Bhagwati, J. N. (1988). Export-promoting trade strategy: Issues and evidence. World Bank Research Observer, 3(1), 27–57. https://doi.org/10.1093/wbro/3.1.27
Bilas, V. et el. (2015). Examining the export-led growth hypothesis: The case of Croatia. Nase Gospodarstvo/Our Economy, 61(3), 22–31. https://doi.org/10.1515/ngoe-2015-0010
Busse, M., & Koeniger, J. (2012). Trade and economic growth: A re-examination of the empirical evidence. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2009939
Dutt, S. D., Ghosh, D., & Austin, A. (2015). Export growth-economic growth Nexus: An empirical re-examination. Journal of Business and Economics, 6(12), 1999–2007. https://doi.org/10.15341/jbe(2155-7950)/12.06.2015/001
Ekanayake, E. . (1999). Exports and eonomic growth in developing countries: Cointegration and error-correction models. International Advances in Economic Research, 5(1), 147–148. https://doi.org/10.1007/BF02295041
Furuoka, F. (2007). Do exports act as “engine” of growth? Evidence from Malaysia. Economics Bulletin, 6(37), 1–14. Retrieved from https://ideas.repec.org/a/ebl/ecbull/eb-07f40023.html
Ghatak, S., & Price, S. W. (1997). Export composition and economic growth: Cointegration and causality evidence for India. Review of World Economics, 133(3), 538–553. https://doi.org/10.1007/bf02707502
Gokmenoglu, K. K., Sehnaz, Z., & Taspinar, N. (2015). The export-led growth: A case study of Costa Rica. Procedia Economics and Finance, 25(May), 471–477. https://doi.org/10.1016/s2212-5671(15)00759-5
Granger, C. (1969). Investigating causal relations by econometric models and cross-spectral methods. Econometrica, 37(3), 424–438. https://doi.org/10.2307/1912791
Gujarati, D. N. (2004). Basic econometrics. New York (4th ed.). New York: McGraw Hill. https://doi.org/10.1126/science.1186874
Hallaert, J. J. (2006). A history of empirical literature on the relationship between trade and growth. Mondes En Developpement, 34(3), 63–77. https://doi.org/10.3917/med.135.0063
Hamori, S. e. el. (2003). Trade and growth relationship: Some evidence from Comoros, Madagascar, Mauritius and Seychelles. Asian and African Area Studies, 3, 174–185. Retrieved from https://repository.kulib.kyoto-u.ac.jp/dspace/bitstream/2433/80018/1/aaas_3_174.pdf
Hatemi-J, A., & Irandoust, M. (2000). Time-series evidence for Balassa’s export-led growth hypothesis. The Journal of International Trade & Economic Development, 9(3), 355–365. https://doi.org/10.1080/09638190050086195
Huang, J., & Ramirez, M. D. (2016). Do exports lead economic output in five Asian countries? A cointegration and Granger causality analysis. Business and Economic Research, 6(2), 30. https://doi.org/10.5296/ber.v6i2.9747
Ibrahim, M. H. (2002). An empirical note on the export-led growth hypothesis: The case of Malaysia. Economic Analysis and Policy, 32(2), 221–232. https://doi.org/10.1016/S0313-5926(02)50030-8
Kugler, P. (1991). Growth, exports and cointegration: An empirical investigation. Review of World Economics, 127(1), 73–82. https://doi.org/10.1007/BF02707311
Lee, C. H., & Huang, B. N. (2002). The relationship between exports and economic growth in East Asian countries: A multivariate threshold autoregressive approach. Journal of Economic Development, 27(2), 45–68. Retrieved from https://ideas.repec.org/a/jed/journl/v27y2002i2p45-68.html
Matsane, S. H. (2010). Empirical investigation on the relationship between trade openness and gross domestic product growth rate: The case of South Africa (1980-2010). Retrieved from https://www.academia.edu/12369140/Empirical_Investigation_on_the_Relationship_between_Trade_Openness_and_Gross_Domestic_Product_Growth_Rate_The_Case_of_South_Africa_1980-2010_
Michaely, M. (1977). Exports and growth: An empirical investigation. Journal of Development Economics, 4(1), 49–53. Retrieved from http://www.sciencedirect.com/science/article/pii/0304-3878(77)90006-2
Narayan, P. K., Narayan, S., Prasad, B. C., & Prasad, A. (2007). Export-led growth hypothesis: Evidence from Papua New Guinea and Fiji. Journal of Economic Studies, 34(4), 341–351. https://doi.org/10.1108/01443580710826380
Nath, H. K. (2005). Export-led growth in Bangladesh: A time series analysis. Applied Economics Letters, 12(6), 361–364. https://doi.org/10.1080/13504850500068194
NKoro, E., & Elvin, A. (2001). Autoregressive Distributed Lag (ARDL) cointegration technique: Application and interpretation. Journal of Statistical and Econometric Methods, 5(3), 63–91. https://doi.org/10.1002/jae.616
Noor, S. I. M., & Rambeli@Ramli, N. (2018). Impact of export, import and growth: Evidence using econometric analysis in Malaysia. International Journal of Accounting, Finance and Business, 3(16), 12–19. Retrieved from http://ijafb.com/archived.asm
Riedel, J. (2016). Trade as the engine of growth in developing countries, revisited. The Economic Journal, 94(373), 56–73. https://doi.org/10.2307/2232215
Rizavi, S. S., Khan, M. K., & Mustafa, S. H. (2010). Openness and growth in South Asia. A Research Journal of South Asian Studies, 25(2), 419–428. Retrieved from http://pu.edu.pk/images/journal/csas/PDF/13-Sayyid Salman Rizavi.pdf
Rois, R., Basak, T., Rahman, M. M., & Majumder, A. K. (2012). Modified Breusch-Godfrey Test for restricted higher order autocorrelation in Dynamic Linear Model – A distance based approach. International Journal of Business and Management, 7(17), 88–97. https://doi.org/10.5539/ijbm.v7n17p88
Ronit, M. (2014). The relationship between the growth of exports and growth of gross domestic product of India. International Journal of Business and Economics Research, 3(3), 135. https://doi.org/10.11648/j.ijber.20140303.13
Saaed, A. A. J., & Hussain, M. A. (2015). Impact of exports and imports on economic growth: Evidence from Tunisia. Journal of Emerging Trends in Economics and Management Sciences (JETEMS), 6(1), 13–21. Retrieved from http://jetems.scholarlinkresearch.com/articles/Impact of Exports and Imports.pdf
Samad, A. (2019). Does Export Lead Economic Growth? Or Other Way? VEC-Granger Causality Evidence from Nine South-East Asian Countries. Journal of Applied Business and Economics, 21(2), 117–128. https://doi.org/10.33423/jabe.v21i1.1459
Sen, S. (2010). International trade theory and policy: A review of the literature (Working Paper No. 635). SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1713843
Tyler, W. G. (1980). Growth and export expansion in developing countries (Discussion Paper No. 5). IPEA (Institute for Applied Economic Research). Retrieved from http://repositorio.ipea.gov.br/bitstream/11058/4846/1/DiscussionPaper_5.pdf