EXPORT-LED GROWTH HYPOTHESIS: EMPIRICAL EVIDENCE FROM MACEDONIA
Abstract
The aim of this study is to empirically test the export-led growth hypothesis in the Republic of Macedonia, as small and open economy. In other words, the question trailed is whether by export promotion the country could impinge on its overall economic development. For that purpose, quarterly data for the period 1998-2006 are plugged into the production function, in which the exports variable plays dominant role, utilized in cointegration testing and vector error correction model. The core findings are supportive to the ELG in Macedonia in the short and long-run simultaneously. Also, gross capital formation is significant in explaining growth in Macedonia.References
Abu-Qarn, A. S. and Abu-Bader, S., (2004) Export-led growth: Empirical Evidence from the MENA Region. Applied Economics, 36(15), p.1685-1695.
Ahmad, J. and Harnhirun, S. (1995) Unit roots and cointegration in estimating causality between exports and economic growth: empirical evidence from the ASEAN countries. Economics Letters, 49, p.329-34.
Amirkhalkhali, S. and Dar, A.A. (1995) A varying-coefficients model of export expansion, factor accumulation and economic growth: Evidence from cross-country time series data. Economic Modelling, 12, p.435-41.
Arnade, C. and Vasavada, U. (1995) Causality between productivity and exports in agriculture: Evidence from Asia and Latin America. Journal of Agricultural Economics, 46, p.174-86.
Awokuse, T.O. (2003) Is the Export-led Growth Hypothesis Valid for Canada? Canadian Jornal of Economics, 36(1), p.126-136.
Bahmani-Oskooee, M. and Alse, J. (1993) Export Growth and Economic Growth: An Application of Cointegration and Error-Correction Modeling. Journal of Developing Areas, 27(4), p.535-542.
Balassa, B. (1978) Exports and economic growth: further evidence. Journal of Development Economics, 5, p.181-189.
Buffie, E.F. (1992) On the condition for export-led growth. Canadian Journal of Economics, 25, p.211-225.
Dutt, S.D. and Ghosh, D. (1996) The Export Growth - Economic Growth Nexus: A Causality Analysis. The Journal of Developing Areas, 30, p.167-182.
Giles, J.A. and Williams, C.L. (1999) Export-led Growth: A Survey of the Empirical Literature and Some Noncausality Results, Econometrics Working Paper EWP9901, p.1-78.
Greenaway, D. and Sapsford, D. (1994) What does liberalization do for exports and growth. Weltwirtschaftliches Archiv, 130, p.152-74.
Grossman, G.M. and Helpman, E. (1991) Innovation and Growth in the Global Economy. (Cambridge, MA: MIT Press).
Jung, W. and Marshall, P. (1985) Exports, Growth and Causality in Developing Countries. Journal of Development Economics, 18, p.1-12.
Kemal, A.R., Din, M.U. and Qadir, U. (2002) Exports and Economic Growth in South Asia, A Study prepared for the South Asia Network of Economic Research Institutes, p.1-35.
Krugman, P.R. (1984) Import protection as export promotion. Cited in: Kierzkowski, H. (ed.) Monopolistic Competition in International Trade. Oxford: Oxford University Press.
Pack, H. (1988) Industrialization and trade. Cited in: Chenery, H. and Srinivasan, T.N. (eds.) Handbook of Development Economics, Volume 1. Amsterdam: Elsevier.
Ram, R. (1987) Exports and economic growth in developing countries: Evidence from time-series and cross-section data. Economic Development and Cultural Change, 36, p.51-72.
Riezman, R.G., Summers, P.M. and Whiteman, C.H. (1996) The engine of growth or its handmaiden?A time series assessment of export-led growth. Empirical Economics, 21, p.77-113.
Romer, P.R. (1990) Are non-convexities important for understanding growth. American Economic Review, 80, p.97-103.
Schenzler, C. (1982) An empirical investigation of the relationship between growth of gross nationalproduct and exports in Chile, India and South Korea. Master’s Thesis, Vanderbilt University, Nashville TN.
Sengupta, J.K. and Espana, J.R. (1994a) Exports and economic growth in Asian NIC’s: An econometric analysis for Korea. Applied Economics, 26, p.45-51.
Sengupta, J.K. and Espana, J.R. (1994b) Exports and economic growth: An econometric analysis for Japan. Applied Economics, 28, p.33-46.
Sheehey, E.J. (1990) Exports and growth: a flawed framework. Journal of Development Economics, 27, p.111-116.
Vogelvang, B. (2004) Econometrics: Theory and Application with E views. McGraw Hill.
Xu, Z (1996) On the Causality between Export Growth and GDP Growth: An Empirical Re-investigation. Review of International Economics, 4(2), p.172-184.