On the Causality between Export Growth and GDP Growth: An Empirical Reinvestigation |
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| Authors: | Zhenhui Xu |
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| Affiliation: | Xu: The College of William and Mary, Williamsburg, VA 23187-8795. Tel: 804-221-2378, Fax: 804-221-2390, Email: . I thank Berhanu Abegaz, John Boschen, Carl Moody, Larry Pulley, Farhad Rassekh, Charles Weise, Kei-Mu Yi, seminar participants at The College of William and Mary, participants at the 1994 Southeastern Economic Theory and International Trade Conference at the University of Virginia, and the anonymous referees for helpful comments. I also thank Joe Zveglich for providing me with data for Taiwan. All errors are entirely my responsibility. |
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| Abstract: | Although conventional wisdom suggests that export growth contributes positively to economic growth, empirical studies on the causal links between exports and output have provided little support for the exportled growth hypothesis. This paper reexamines the direction of causation by handling properly two important issues in causality tests: the characteristics of the data, and the choice of optimal lags. The results of this study show that in a sample of 32 economies, the export-led hypothesis is supported by 17 economies and is strongly supported by 9 economies. |
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