Most of the previous studies are based on either bivariate or trivariate framework. This study reinvestigates the exportled growth hypothesis for the four largest economies of south asian sub region namely india, pakistan, bangladesh, and sri lanka under multivariate timeseries framework. This paper aims to investigate the exportled growth hypothesis in kenya using annual time series data from 1976 to 2011 and dynamic time series techniques of auto regressive distributed lag and 2stage least squares. The economic development and growth literature contains extensive discussions on relationships between exports and economic growth. Implications for developing asia jesus felipe december 2003 jesus felipe is an economist in the economics and research department of the asian development bank.
Does the exportled growth hypothesis hold for nigeria. Specifically, the study examined the validity of the exportled growth hypothesis in nigeria employing the todayamamoto granger causality framework. Empirical results supportthe export led growth hypothesis in zimbabwe and reveal that a longrun relationship exists between exports and export gdp and that the direction of relationship runs from nonexports to export gdp non in both the shortrun. If the inline pdf is not rendering correctly, you can download the pdf file here. In addition, the granger causality test shows that botswanas economy propels exports production. Evidence shows that out of 71 socalled exportled growth episodes, only 37 of them are consistent with the exports driving growth hypothesis. D1, felix obioesio department of economics, university of uyo, nigeria.
The study utilizes annual data for the period 1980 to 2012. The hypothesis to be tested is, does export expansion cause economic growth in egypt. Further econometric evidence from pakistan nasim shah shirazi1 turkhan ali abdul manap2 abstract this paper reinvestigates export led growth hypothesis for pakistan. Exportoriented industrialization eoi sometimes called export substitution industrialization esi, export led industrialization eli or exportled growth is a trade and economic policy aiming to speed up the industrialization process of a country by exporting goods for which the nation has a comparative advantage. A significant concern with this latter model is that it may risk turning global growth into a zerosum game. Ramesh, mohan and nandwa, boaz 2007, testing exportled growth hypothesis in kenya.
This implies that the causality running from export to economic. The main objective of the study is to investigate the comparative influence of import and export on economic growth of developing countries in the world, using exportled growth elg and importled growth ilg hypothesis. As a result, the major purpose of including the export and import. The model in this paper, however, shows that the nontradable sector may also generate high economic growth together with high export growth. In order to demonstrate the application of this procedure, this study examined the exportsgrowth nexus in lowincome and lower middleincome countries in africa. The result shows that there is unidirectional causality running from export to economic growth. The insignificant growth effect was robust across sample periods and model specifications. Consider for example the impact of deforestation and overfishing and degradation of land by industrialscale farming.
The objective of this paper is to test the validity of the exportled growth hypothesis in the malaysian economy using a more comprehensive sample period and a recent technique, that is, the bounds testing approach. Understanding the role of manufacturing in development. Abstract empirical evidence linking exports to economic growth has been mixed and inconclusive. Is the exportled growth hypothesis valid for an export. Previous studies on economic growth have shown that countries that relied on exports to propel their economies have been successful in achieving robust.
This study analyzes the issue of elg hypothesis in egypt using the var analysis, quarterly timeseries data over the period 19912009. Overall, exportled growth has been important for many countries. We adopt a panel threshold autoregressive ptar model to investigate the exportled growth elg hypothesis in six middle east and north africa countries from 1976 to 2005. Two regimes are distinguished according to the threshold variable exportimport ratio. As the outcomes indicated, to recover the economy, croatia should put more emphasis on the development of exporting sectors. Pdf is the exportled growth hypothesis valid for nigeria. This paper examines the validity of the export led growth hypothesis in kenya for the period 1980 to 2011 using time series data. One debate centers on whether countries should promote the export sector to obtain economic growth. In other words, beyond exportled growth hypothesis, nonoil exportled growth hypothesis also holds in nigeria. This article examines the exportled growth hypothesis for korea in fivevariable vector autoregressive and vector error. On the exportled growth hypothesis for the little dragons. Exportled growth hypothesis, multivariate granger causality test. Is the exportled growth hypothesis valid for nigeria.
It is essential to verify these hypothesis so as that proper policies may be formulated to help place the economy on a path of development and maintainable growth. The views expressed in this working paper are those of the authors and do not necessarily represent those of the imf or imf policy. From these results, the study nullifies the exportled growth hypothesis and postulates that the botswana economy rather follows the growthdriven exports hypothesis gde. The granger nocausality procedure developed by toda and yamamoto journal of econometrics, 66, 1995 was applied to test the causality link between exports and economic growth in a var system. The paper has employed cointegration and multivariate granger causality developed by toda and yamamoto 1995 to study the longrun and short. The regression result and the cointegration analysis show that growth evidence of nonoil exports exists in nigeria. The granger causality test results revealed no any support of the exportled growth elg hypothesis for tanzania. An abundant empirical literature on this exportled growth elg hypothesis has followed. The role of the exchange rate, money, and government expenditure from korea. Using standard procedures of unit root testing, cointegration.
The industrialization experiences of japan and the republic of korea 21 d. Panel data analysis of developing countries in doaj. The export led growth hypothesis, advocates that export growth is key in enhancing economic growth yet no consensus has been reached on the causal relationship between the two. Evidence of developing country crowdingout abstract over the last two decades there has been a dramatic shift in the stance of development policy with importsubstitution being replaced by the exportled growth.
This paper finds no support for exportled growth hypothesis in pakistan. The granger nocausality procedure developed by toda and yamamoto 1995 was applied to test the causal link between real export growth and real industrial output growth. Evidence of developing country crowdingout abstract over the last two decades there has been a dramatic shift in the stance of development policy with importsubstitution being replaced by the export led growth. The study has used purposive sampling technique and selected the member countries of d8 such as bangladesh, egypt, indonesia, iran, malaysia, nigeria, pakistan and turkey. How applicable is exportled growth and importled growth. The model uses quarterly and annual time series data from march 1997 to. Is the exportledgrowth hypothesis, valid for egypt.
The exportled growth hypothesis has been examined for the korean economy that heavily depended on international trade. There is evidence for the exportled growth hypothesis elgh and fdiled growth hypothesis flgh. A comparison of domestic demand and exportled growth. According to its advocates, exports can perform as an engine. In accordance with the results, we found evidence supporting the exportled growth hypothesis in croatia. We employed a textbookstyle regression model and found that export expansion had an insignificant effect on economic growth. In contrast to the exportled growth hypothesis, it can also be argued that causality runs from the growth of output to the growth of exports. It holds that the overall growth of countries can be generated not only by increasing the amounts of labour and capital within the economy, but also by expanding exports.
Konya 2006 employed seemingly unrelated regression sur method. The mwald statistics for south korea support the existence of the exportled growth hypothesis from 1972 to 1989 and from 1998 onwards. Pdf the relationship between economic growth, exports and imports in pakistan from1990q1 to 2008q1 has been. The exportled growth hypothesis is tested by estimating an augmented growth equation on the basis of times series data from china. This paper examines the validity of the export led growth elg hypothesis in the context of the jamaican economy, among other selected latin american and caribbean countries. Abstract the basic theorizing of the elgh is that countries can record significant levels of growth if there could be expansion in the export.
An empirical note on the exportled growth hypothesis. For the case of singapore, the exportled growth hypothesis is only valid prior to 1990 as the mwald test statistics fluctuate above the cutoff value of 1. Article information, pdf download for a comparison of domestic demand and. Empirical evidence from selected subsaharan african.
The procedure integrates a fishertype causality method in the statistical analysis. This study proposes a novel statistical procedure to test the exportled growth hypothesis. An analysis of socalled exportled growth prepared by jie yang1 authorized for distribution by jianhai lin september 2008 abstract this working paper should not be reported as representing the views of the imf. The 2stage least squares is used to correct for the. Based on this model, both exports and labour force have stimulated positive adjustment to economic growth, whereas variables such as imports, exchange rate and the east asian. A cointegration and causality approach johnson atan ph. In the next section, we provide an overview of the empirical literature of the exportled growth hypothesis for african countries.
The analysis reveals that both exports and the gdp series in log levels have unit roots but they do not. However, a survey of the literature indicates that a great variety of techniques, data sets and country groups have been employed in empirical assessments of the exportled growth hypothesis, with an equally broad variety of results. However, the growthled exports gle hypothesis for tanzania was supported by the results of this study, implying that the government of tanzania needs to. Information about the openaccess article export and economic growth in the case of the manufacturing industry. The objective of this study is to examine the validity of exportled growth elg hypothesis in selected subsaharan african ssa countries for the period from. These hypotheses, which are supported, are based on the idea that exports and fdi variables are the main drivers of economic growth. Article information, pdf download for revisited exportled growth.
The hypothesis of export led growth is tested using annual time series data for australia. Pdf export led growth hypothesis nasim shah shirazi. Comparative analysis between exportled growth and import. The present empirical note reexamines the exportled growth hypothesis for the case of malaysia. This study empirically analyzed the relationship between export and economic growth. The export led growth hypothesis elgh postulates that export expansion is one of the main determinants of growth. The exportled growth hypothesis elgh postulates that export growth is one of the key determinants of economic growth. The relationship between trade, fdi and economic growth in. In other words, is the exportledgrowth elg hypothesis valid for egypt. The exportled growth hypothesis is tested using quarterly time series data for hong kong, korea, and taiwan and by constructing a vector autoregression var model. Fmols and dols estimation showed a positive impact of investment, government expenditure and exports on the economic growth.
Exportled development in peru, 19501967, harvard university press, cambridge, ma sentsho, j. A multivariate cointegration and causality evidence for jordan jamal husein. It is a theory that has been misunderstood and is seen to be at odds with the stylised facts of economic growth and development as well as with mainstream neoclassical wisdom. Exportled growth might be unsustainable if it contributes extraction of natural resources beyond what is required for long term balanced growth to be maintained.
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