Abstract
This paper has examined a long - run causal nexus between export and economic growth in six regions of the world. For this purpose, the authors have applied the Granger causality test. Using annual data for the period of 1971 – 2018, the authors have tested the direction of the causality between the variables. The research has found unidirectional causality running from export to economic growth in Asia, Europe, North America and Oceania. Moreover, the research has noticed the absence of the Granger causality in Africa and Latin America & the Caribbean. The findings could be useful in implementing regional policy. In Asia, Europe, North America and Oceania policy makers should aware of the importance of trade and focus on implementing export-oriented policies to stimulate economic growth and achieve sustainable development.
Highlights
The interrelationship between export and economic growth has been a subject of debate among the scientists for a long time (Smith, 1776; Feder, 1982; Fryges, 2009; Mishra, 2011; Wagner, 2012; Tekin, 2012; Abbas, 2012; Dritsaki, 2013; Saaed et al, 2015; Shafiullah et al, 2017; Guntukula, 2018; Sultanuzzaman et al, 2019; Mensah & Okyere, 2020; Adebayo, 2020)
With reference to the results of the Granger causality test, it should be stated that for Asia, Europe, North America and Oceania the causality has been in favour of a unidirectional running from export to economic growth
The main objective of this research is to examine the causal interrelationship between export and economic growth in the world regions
Summary
The interrelationship between export and economic growth has been a subject of debate among the scientists for a long time (Smith, 1776; Feder, 1982; Fryges, 2009; Mishra, 2011; Wagner, 2012; Tekin, 2012; Abbas, 2012; Dritsaki, 2013; Saaed et al, 2015; Shafiullah et al, 2017; Guntukula, 2018; Sultanuzzaman et al, 2019; Mensah & Okyere, 2020; Adebayo, 2020). Scientific studies on the export-economic growth nexus provide controversial results. The evidence of some studies supports export-led growth hypothesis while the other group advocates for growth-driven export hypothesis. The other studies provide the evidence that exports lead to economic growth and economic growth promotes export, i.e., the bi-directional causality between export and economic growth. According to the neutrality hypothesis, there is no relationship between export and economic growth. It is notable, that causality between export and economic growth differs in various regions of the country or even different periods of the same country. Understanding the relationship between export and economic growth might be significant in developing, implementing or improving the public policy of economic growth in a country or region
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