Causality between Export and Growth: Evidence from South Asian Countries

Eusuf, M Abu and Ahmed, Mansur (2007): Causality between Export and Growth: Evidence from South Asian Countries. Published in: The Jahangir Nagar Economic Review , Vol. 19, No. 1 (30 June 2008): pp. 73-86.

Abstract

Strong economic growth accompanied with robust export performance leads many people to conclude that export sector of a country has pivotal role in the economic growth of that country. Empirical evidence on export growth nexus has been mixed and inconclusive. This study examined whether there was any time series support for such export-led growth hypothesis for South Asian Countries. Engle-Granger's Error Correction Model (ECM) was used to test the Granger causality between export and output. The study had produced fairly mixed results, and did not find any conclusive evidence in favor of export-led growth for South Asian Countries. While Pakistan, Srilanka and Bhutan were the cases of export-led growth, India, Nepal, and Maldives show the opposite result of growth-led exports. In one country, namely Bangladesh, the data had failed to detect any causality in either direction which is attributed in low value addition in export.

• Item Type: MPRA Paper
• Language: English
• Keywords: Export-led growth hypothesis, Granger causality test, Unit Root Tests, Error Correction Model
• Subjects: F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies

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