An Analysis of Export Led Growth Hypothesis: Cointegration and Causality Evidence from Sri Lanka

Tahir, Muhammad Naveed; Humayun, Khan; Israr, Muhammad; Qahar, Abdul

doi:10.13189/aeb.2015.030205

Cited by 8 publications

(11 citation statements)

References 28 publications

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“…Hence, this study finds no evidence to support the validity of the ELG hypothesis for Sri Lanka. The finding of this study is consistent with Abhayaratne (1996); Dilrukshini (2008) and Tahir et al (2015) for Sri Lanka.…”

Section: Table 5: Granger Causality Test Results -Chi Statisticssupporting

confidence: 90%

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Revisiting the Export-led Growth Hypothesis for Liberalised Sri Lanka

Kumari¹

2020

Staff Studies

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The export-led growth (ELG) hypothesis postulates the existence of a strong positive linear relationship between exports and output growth in the long run for a given economy. The empirical nexus between exports and economic growth so far is mixed. Thus, this paper aims to empirically shed more light on the causal relationship between exports and economic growth in the context of a small open economy by re-investigating the validity of the ELG hypothesis for Sri Lanka. Using time series data on Gross Domestic Product (GDP), exports, imports and remittances over four decades from 1980 to 2019 during which Sri Lanka had a liberalised economy regime in place, Johansen cointegration test results provide evidence of a long run association among the variables. However, vector error correction model (VECM) results fail to confirm the long run relationshipbetween exports and GDP. Consequently, this paper finds no evidence to support the validity of the ELG growth hypothesis for Sri Lanka. Hence, the findings raise the question of the efficacy of the trade policies that Sri Lanka has adopted since the early 1980s.

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Section: Table 5: Granger Causality Test Results -Chi Statisticssupporting

confidence: 90%

“…She employed annual data on GDP, exports, imports, investment and labour for 1960-2015, and adopted VARs for the empirical estimation. Confirming both Abhayaratne (1996) and Dilrukshini (2008), Tahir et al (2015) also found no evidence in support of the ELG hypothesis for Sri Lanka.…”

Section: Empirical Literaturementioning

confidence: 74%

Revisiting the Export-led Growth Hypothesis for Liberalised Sri Lanka

Kumari¹

2020

Staff Studies

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“…Unit root, Granger causality, rolling window techniques are applied and findings show that trade openness index negatively impacts economic growth. Tahir, Khan, Israr, and Qahar (2015) examines time-series data for the period 1981-2012 for Sri Lanka. GDP, Imports, exports, unemployment and investment are used.…”

Section: Empirical Literature On Export-led Growth Hypothesismentioning

confidence: 99%

Fish Exports and Economic Growth: The Pakistan’s Experience

Jawaid

Siddiqui

Atiq

et al. 2019

Global Business Review

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This study attempts to explore first time ever the relationship between fish exports and economic growth of Pakistan by employing annual time series data for the period 1974–2013. Autoregressive distributed lag and Johansen and Juselius cointegration results confirm the existence of a positive long-run relationship among the variables. Further, the error correction model reveals that no immediate or short-run relationship exists between fish exports and economic growth. Different sensitivity analyses indicate that initial results are robust. Rolling window analysis has been applied to identify the yearly behaviour of fish exports, and it remains negative from 1979 to 1982, 1984 to 1988, 1993 to 1999, 2004 and from 2010 to 2013, and it shows positive impact from 1989 to 1992, 2000 to 2003 and from 2005 to 2009. Furthermore, the variance decomposition method and impulse response function suggest the bidirectional causal relationship between fish exports and economic growth. The findings are beneficial for policymakers in the area of export planning. This study also provides some policy implications in the final section.

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“…The ultimate objective of any country is to achieve and to sustain economic growth both in the present generation and the upcoming generation (Tahir, Khan, Israr, & Qahar, 2015). Economic growth is highly dependent on the efficient utilization of economy's factors of production.…”

Section: Introductionmentioning

confidence: 99%

Relationship Between FDI and Economic Growth in the Presence of Good Governance System: Evidence from OECD Countries

Raza

Shah

Arif

2019

Global Business Review

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This study analyses the relationship between foreign direct investment (FDI) and economic growth in the presence of good governance system in the Organization for Economic Co-operation and Development (OECD) countries. The dataset comprised of the years 1996-2013. Fixed effect model and the Generalized method of moments (GMM) estimator are used in this study. The result of the study unveils that all the variables have a significant positive association with economic growth. Moreover, the study establishes the interaction terms which also depict a positive effect on economic growth. Further, the Granger causality test shows that the bidirectional causal relationship exists between the FDI and regulatory quality (REQ) on economic growth, whereas the unidirectional causal relationship is found among the corruption control, political stability (POS), voice and accountability (VAC), government effectiveness (GOE) and economic growth. Finally, it can be concluded from the above results that the more the countries maintain their institutional quality the better will be the economic growth and the FDI inflows. This result gives valuable policy implications, which the government should use to improve the economic growth. Further, the result obtained from this study is beneficial for policymakers who can draft effective government policies which will foster the economic growth rate of the country. Last but not least, there is a need to improve the REQ which can only be improved subject to changes in the laws of corruption.

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An Analysis of Export Led Growth Hypothesis: Cointegration and Causality Evidence from Sri Lanka

Cited by 8 publications

References 28 publications

Revisiting the Export-led Growth Hypothesis for Liberalised Sri Lanka

Revisiting the Export-led Growth Hypothesis for Liberalised Sri Lanka

Fish Exports and Economic Growth: The Pakistan’s Experience

Relationship Between FDI and Economic Growth in the Presence of Good Governance System: Evidence from OECD Countries

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