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The validity of the export-led growth hypothesis: some evidence from the GCC

Kalaitzi, Athanasia Stylianou and Chamberlain, Trevor William (2020) The validity of the export-led growth hypothesis: some evidence from the GCC. Journal of International Trade and Economic Development. ISSN 0963-8199

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Identification Number: 10.1080/09638199.2020.1813191

Abstract

This study investigates the validity of the export-led growth hypothesis (ELG) in five GCC countries, namely, Bahrain, Kuwait, Oman, Saudi Arabia and the United Arab Emirates. The study uses an augmented production function and annual time series data over the period 1975-2016. For the estimation of the models, the Johansen cointegration test is employed to test the existence of a long-run relationship between growth and exports. In addition, the multivariate Granger causality test in a vector autoregressive model framework and a modified version of the Wald test are applied to examine the direction of the short-run and long-run causality respectively. The empirical results provide evidence to support the validity of the ELG hypothesis in the short-run for the UAE, while the converse is true for Bahrain. In addition, a bi-directional causality exists between exports and growth in the case of Kuwait. In the long-run, the validity of the ELG is confirmed in the case of Bahrain, while economic growth causes exports in the case of Kuwait and Saudi Arabia.

Item Type: Article
Official URL: https://www.tandfonline.com/toc/rjte20/current
Additional Information: © 2020 Informa UK Limited, trading as Taylor & Francis Group
Divisions: Middle East Centre
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HC Economic History and Conditions
JEL classification: C - Mathematical and Quantitative Methods > C3 - Econometric Methods: Multiple; Simultaneous Equation Models; Multiple Variables; Endogenous Regressors > C32 - Time-Series Models
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output (Income) Convergence
Date Deposited: 17 Sep 2020 17:30
Last Modified: 20 Oct 2020 06:07
URI: http://eprints.lse.ac.uk/id/eprint/106586

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