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Evaluation of Trade Influence on Economic Growth in China: A Time Series Analysis

Bakari, Sayef and Saaidia, Fatma (2016): Evaluation of Trade Influence on Economic Growth in China: A Time Series Analysis.

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Abstract

This paper investigates the relationship between exports, imports, and economic growth in China. In order to achieve this purpose, annual data were collected from the reports of World Bank for the periods between 1960 and 2015, was tested by using Augmented Dickey-Fuller (ADF) and Phillip-Perron (PP) stationary test, cointegration analysis of Vector Error Correction Model and the Granger-Causality tests. According to the result of the analysis, unit root tests show that economic growth, exports and imports series become stationary when first difference is considered. Also, it was determined by using co integration analysis that there is relationship between the three variables in Chine in the long run term only. Also, and according to the Vector Error Correction Model, exports have a positive effect on economic growth. However, imports have a negative effect on economic growth. These results provide evidence that exports are seen as the source of economic growth in China.

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