Economic Growth, Export, and External Debt Causality: The Case of Asian Countries

Abstract

The issue of how developing countries can accelerate their economic growth is of crucial importance. The two primary alternative routes to development are inward-oriented growth strategies, which emphasises import-substitution industrialisation (ISI); and outward-oriented policies, which emphasises the economic benefits of participation in the world economy, that is, export-led growth (ELG). The late 1960s and 1970s witnessed a disillusionment with ISI in many developing countries, leading to a reduction in protectionist measures. The 1980s witnessed further intensification of liberalisation measures as many countries retreated from socialism, regulation and planning. The dis-advantages of ISI, the potential strength of ELG policies and the conditions necessary for successful transition from an inwardoriented regimes to an outward oriented have been extensively researched1 and beyond the scope of the present study. Moreover many of the rapidly growing newly industrialising countries (NICs) lend support to the idea that export promotion can be an effective development strategy. Naturally such a line of causation is consistent with macroeconomic theory, where exports are treated as injections into the economy [Kaldor (1967); Feder (1982); Romer (1989); Krueger (1990) and Marin (1992)]

Causality between Economic Growth, Export, and External Debt Servicing: The Case of Lebanon

“…Shirazi and Manap (2004) found strong long-run relationship among the three variables. Moreover, Ahmed et al (2000) examined the trivariate causality between export, external debt and economic growth for South and South-East Asian countries and reached the result that there is no joint feedback among them. Moreover, Amoateng and Amoako-adu (1996) examined the causality relationship among exports, external debt and economic growth in African countries, their results indicated bidirectional causality between external debt, economic growth and exports.…”

Pakistan, Growth, Dependency, and Crisis

“…A. Khan & Qayyum, 2007). Exports alone are found to have a positive (Ahmad, Alam, & Butt, 2003) or no relation with GDP growth (Q. M. Ahmed, Butt, & Alam, 2000;Akbar & Naqvi, 2000). Exports are also found to have a positive relationship with household saving (Iqbal, 1993).…”

“…External debt is found to have no relation to GDP growth (Q. M. Ahmed et al, 2000); foreign savings an insignificant impact on domestic investment (Aslam, 1987;Franco-Rodriguez, Morrissey, & McGillivray, 1998;Nasir & Khalid, 2004); and FDI a positive (Atique, Khan, & Azhar, 2004) and a negative (Shabbir & Mahmood, 1992) relation with GDP growth. World Bank/International Monetary Fund (IMF) adjustment lending is found to have no relation with GDP growth, savings, and foreign borrowing; and a positive impact on investment and government spending (Iqbal, 1994).…”

The Missing Economic Magic: The Failure of Trade Liberalization and Exchange Rate Devaluation in Pakistan, 1980–2012

“…The empirical and case study results generally indicate a positive, if small, but nonrobust and variable link from trade liberalization to economic growth. For Pakistan, studies generally find a positive link between trade liberalization and economic growth (see Iqbal & Zahid, 1998;Ahmad, Alam, & Butt, 2003;Din, Ghani, & Siddique, 2003;Khan & Qayyum, 2007), although some studies find no link (Ahmed, Butt, & Alam, 2000;Akbar & Naqvi 2000). There have been brief interludes when macroeconomic reform has clearly led to rapid export growth, such as after the 1972 devaluation (Kemal & Alvie, 1975) and with stabilization in the early 2000s (Lorie & Iqbal, 2005).…”