Causality Relationship Between Import, Export and Growth Rate in Developing Countries

In this paper, we tried to determine the relationship between imports, exports and growth rate in developing countries. Within this scope, 6 developing countries (Argentina, Brazil, China, Malaysia, Mexico and Turkey) were analyzed in this study. In order to achieve this purpose, annual data for the periods between 1961 and 2014 was tested by using Engle Granger co-integration analysis, Vector Error Correction Model and Toda Yamamoto causality analysis.
2 years ago

Authors: Serhat YUKSEL, Sinemis Zengin
 
Journal Title: International Journal of Commerce and Finance
 
Publisher: Istanbul Commerce University
 
Abstract
 
In this paper, we tried to determine the relationship between imports, exports and growth rate in developing countries. Within this scope, 6 developing countries (Argentina, Brazil, China, Malaysia, Mexico and Turkey) were analyzed in this study. In order to achieve this purpose, annual data for the periods between 1961 and 2014 was tested by using Engle Granger co-integration analysis, Vector Error Correction Model and Toda Yamamoto causality analysis.
 
According to the result of the analysis, it was determined that there is not any relationship among three variables in Brazil and Mexico. On the other hand, we defined that increase in export causes higher growth rate in Argentina. Moreover, it was concluded that there is a causal relationship from import to export in China and Turkey.
 
Furthermore, it was determined that export causes higher import in Malaysia. Therefore, it can be concluded that the relationship between import, export and growth rate is not same for all developing countries.
 

Illustration Photo: Izmir port in Turkey (credits: Tambako The Jaguar / Flickr CC BY-ND 2.0)

Comments

No comments to display.