| Abstract: | This paper examines the hypothesis of export-led growth for the ‘Four Little Dragons' in Asia. The framework of analysis is a five-variable vector autoregressive model. The relationship between exports and output is evaluated through the computation of variance decompositions, impulse response functions, and cointegration. The variance decompositions indicate significant feedback relations between exports and output. The impulse response functions indicate significant, positive feedback effects in the short run. The cointegration test, however, does not yield similar results for the long-run relations. The results are at odds with the export-led growth hypothesis, but the short-run results appear consistent with the feedback model in which export promotion and economic growth reinforce each other in the process of economic development. |
