Abstract
This paper seeks to empirically examine the export-led growth and import-led growth hypotheses in Sierra Leone from 1980 to 2020. It employed the ARDL bounds testing approach to cointegration. The empirical results show that both the Export-led growth (ELG) and Import-led Growth (ILG) hypotheses are indeed valid in Sierra Leone. However, exports appear to be relatively more important than imports in driving economic growth in both the short and long run horizons. It is therefore recommended amongst others that the government continue to focus on strategies that will broaden the export base, while at the same time create a conducive environment for foreign investment that could result in the importation of capital goods into the country to support growth.
Highlights
Theories of the trade-growth nexus are some of the oldest in economic history and still remain pertinent today
Critiques of the export-led growth hypothesis and proponents of the Import-led growth hypothesis are suggesting that economic growth may have come from increased productivity due to imports, which enhance domestic economic activities and cause an import-led growth as well as growth-led export
Following Liew (2004)3 the ARDL model is estimated based on the Akaike
Summary
Theories of the trade-growth nexus are some of the oldest in economic history and still remain pertinent today. In the 19th century, the neoclassical economists claimed that international trade is one of the main causes of economic growth of nations (Marshall, 1959) This was a reaffirmation of the earlier classicalists’ view that international trade induce economic growth through specialisation, which generates surplus goods and services that can be exchanged for money or other commodities Trade in the form of exports and imports have been strongly endorsed by standard economic theory as a catalyst for economic growth (Carbaugh, 2003). In this respect, most developing economies have applied international trade strategy for growth in several jurisdictions, following it success stories in China, India, Japan, and the Asian tigers. The important role of exports and imports in economic performance cannot be overemphasized given their strategic role in determining the trade balance of a country and the welfare of the citizens of a nation
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
