Exports and economic growth:some empirical evidence from the Arab Gulf countries

Abstract

This paper investigates the relationship between exports and economic growth in four of the Arab Gulf countries, namely, Saudi Arabia, Kuwait, UAE, and Oman for the period 1973-93. The estimates presented indicate a positive and significant relation between the two variables. Also, the statistical adequacy of the models used is supported by the following diagnostic tests. The Bruesch-Godfrey statistic suggests the absence of serial correlation. The Farely-Hinich test fails to reject the null hypothesis that the models are structurally stable. And both the White and Hausman specification tests show that the models are correctly specified.

Export-led growth in the UAE: multivariate causality between primary exports, manufactured exports and economic growth

“…The empirical study by Al-Yousif (1997) examines the existence of a long-run relationship between exports and economic growth in four of the Arab Gulf countries, namely Saudi Arabia, Kuwait, UAE and Oman, over the period . This study uses an augmented production function with exports, government expenditure and terms of trade as additional inputs of production and the two-step cointegration technique proposed by Engle and Granger (1987).…”

“…Most of these studies indicate that export expansion permits the exploitation of economies of scale and increases the rate of employment in laborsurplus economies. Moreover, the export expansion leads to the adoption of advanced technologies, covering the increasing domestic and foreign demand (Balassa 1978;Feder 1982;Al-Yousif 1997;Abou-Stait 2005). In addition, some studies demonstrate that this positive impact appears to be particularly strong among the more developed countries and in some cases could be negligible among the least developed countries (Michaely 1977;Kavoussi 1984;Vohra 2001).…”

“…Within the context of UAE economy, evidence on the causal relationship between exports and economic growth has been limited and mixed, while no study has yet examined the causality between disaggregated exports and economic growth. In particular, two studies, that by Al-Yousif (1997) and that by El-Sakka and Al-Mutairi (2000) have investigated the causality between total exports and economic growth in the UAE and their results are contradictive. Al-Yousif (1997) confirms the validity of the ELG based on a regression equation, where aggregate output is the dependent variable and export variable is the explanatory variable.…”

“…In particular, two studies, that by Al-Yousif (1997) and that by El-Sakka and Al-Mutairi (2000) have investigated the causality between total exports and economic growth in the UAE and their results are contradictive. Al-Yousif (1997) confirms the validity of the ELG based on a regression equation, where aggregate output is the dependent variable and export variable is the explanatory variable. This study examines the statistical significance of the coefficient of the export variable to draw conclusions for the validity of the ELG, but the causality does not necessarily run from exports to economic growth.…”

A further examination of the export-led growth hypothesis

“…This group includes, for example, Bahmani-Oskooee and Alse (1993), Van den Berg and Schmidt (1994), Ahmad and Harnhirun (1995), Al-Yousif (1997), Abu-Qarn and Abu-Bader (2004), Love and Chandra (2004), Bahmani-Oskooee and Oyolola (2007), and Bahmani-Oskooee and Economidou (2009).…”