DP362 Is the Export-Led Growth Hypothesis Valid for Industrialized Countries?

Author(s): Dalia Marin
Publication Date: January 1990
Keyword(s): Developed Countries, Exports, Growth Model, Growth Rates, Productivity
JEL(s): 122, 226, 423, 431
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=362

The comovement between exports and productivity observed in many countries suggests a direct link between these two variables. This paper tries to establish whether such a causal link exists for four developed market economies, using co-integration and Granger-causality techniques. These techniques offer a means to overcome serious problems encountered in previous attempts to examine this relationship, while recent trade theory suggests that the relationship between trade and productivity is fundamentally ambiguous. Both reasons call for more empirical evidence. The findings of the econometric analysis suggest that exports, productivity and the terms of trade move together in the long run in all countries except the United Kingdom.