Vol 6 No 1 (2019)
Revisiting the Exports and Economic Growth Nexus: Rolling Window Cointegration and Causality Evidence from Cote d’Ivoire, Malaysia, Pakistan and South Africa
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AbstractThis paper reexamines the relationship between exports and economic growth in Cote d’Ivoire, Malaysia, Pakistan and South Africa using time-varying cointegration and causality tests. The cointegration results suggest that exports, investment in physical capital and GDP move together in the long-run in the four countries. Furthermore, the full sample Granger causality tests support the export-led growth hypothesis for Malaysia and Pakistan, and the growth-led exports hypothesis for South Africa. However, the rolling window cointegration and causality tests show that the long-run and also the causal relationships between exports and GDP are time-varying. For most time periods we do not find any causal relationship between exports and GDP. There are, however, sub-periods during which unidirectional or bidirectional causal relations were found. Therefore, export-promoting strategies are not always effective tools to stimulate economic growth.
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