Munich Personal RePEc Archive

The Export-Led Growth Hypothesis: New Evidence and Implications

Bosupeng, Mpho (2015): The Export-Led Growth Hypothesis: New Evidence and Implications. Published in: Grin Publishing Verlag GmbH : pp. 1-30.

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Abstract

Previous studies on economic growth have shown that countries that relied on exports to propel their economies have been successful in achieving robust economic growth. This study considers Botswana’s mineral exports production from 2003Q1 to 2012Q4 and relates each export commodity with the GDP. This study applies the Johansen cointegration test and the Granger causality test to determine the applicability of the export-led growth hypothesis for the Botswana economy. The cointegration test shows that there is long run comovement between GDP and four of Botswana’s mineral exports namely: matte; diamonds; copper; nickel and soda ash. In addition, the Granger causality test shows that Botswana’s economy propels exports production.From these results, the study nullifies the export-led growth hypothesis and postulates that the Botswana economy rather follows the growth-driven exports hypothesis (GDE). The study further postulates recommendations and also potential areas of research.

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