Comparative Analysis Between Export-Led Growth and Import-Led Growth: A Study on Developing Eight (D-8)

Maimuna Akter; Md Nahid Bulbul

doi:doi:10.11648/j.ijefm.20170504.11

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Comparative Analysis Between Export-Led Growth and Import-Led Growth: A Study on Developing Eight (D-8)

Maimuna Akter, Md Nahid Bulbul

Published in International Journal of Economics, Finance and Management Sciences (Volume 5, Issue 4)

Received: 12 May 2017 Accepted: 25 May 2017 Published: 6 July 2017

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Abstract

The main objective of the study is to investigate the comparative influence of import and export on economic growth of developing countries in the world, using Export-Led Growth (ELG) and Import-Led Growth (ILG) hypothesis. The study has used purposive sampling technique and selected the member countries of D-8 such as Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey as sample. Total import, total export, and GDP growth rate, as indicator of economic growth, have been used as variables for the study. The study has selected time series and panel data of the variables from year 2001 to year 2015. To detect unit root of variables, Augmented Dickey Fuller (ADF) Test and Phillips-Perron (PP) Unit Root Test have been used. Moreover, the cointegration among variables has been examined using Johansen Cointegration Test. The study has also used Vector Autoregressive (VAR) model and Vector Error Correction (VEC) model to define the presence of short run and long run causality. Finally, Granger Causality Test has been used to examine the presence of unidirectional and bidirectional causality among the variables in short and long-run. The study shows that the variables have unit root at level and have become stationary at first and second difference. In most of the selected countries, the study has found cointegration and unidirectional causality among the variables. In Bangladesh, both import and export have been found to contribute to economic growth in short run, and the relationship is unidirectional. Moreover, these have been found to influence economic growth of Nigeria in long run. On the other hand, the study has discovered economic growth and export of Turkey to granger-cause its import in short and long run. However, along with economic growth, import has been found to granger-cause export of Egypt and Indonesia in short run, and export of Malaysia in long run. Finally, Pakistan and Iran have been found to have no granger-causality among import, export and economic growth.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 5, Issue 4)
DOI	10.11648/j.ijefm.20170504.11
Page(s)	204-212
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2017. Published by Science Publishing Group

Keywords

Economic Growth, Total Export, Total Import, GDP Growth Rate, Export-Led Growth, Import-Led Growth, D-8

References

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[2]	Riezman, R, Whiteman, C. H & Summers, P. M 1996, ‘The engine of growth or its handmaiden? a time-series assessment of export-led growth’, Empirical Economics, vol. 21, pp. 77-110.
[3]	Thangavelu, S & Rajaguru, G 2004, ‘Is there an export or import-led productivity growth in rapidly developing Asian countries? a multivariate VAR analysis’, Applied Economics, vol. 36, no. 10, pp. 1083-1093.
[4]	Awokuse, T 2008, ‘Trade openness and economic growth: is growth export-led or import-led?’, Applied Economics, vol. 40, no. 2, pp. 161-173.
[5]	Tang, T & Ravin, C 2013, ‘Export-led growth in Cambodia: an empirical study’.
[6]	Shirazi, N & Manap, T. A 2005, ‘Export-led growth hypothesis: further econometric evidence from South Asia’, The Developing Economies, vol. XLIII, no. 4, pp. 472-488.
[7]	Dritsakis, N, Varelas, E & Adamopoulos, A 2006, ‘The main determinants of economic growth: an empirical investigation with granger causality analysis for Greece’, European Research Studies, vol. IX.
[8]	Anwer, M, & Sampath, R 1997, ‘Exports and economic growth’.
[9]	Ekanayake, E 1999, ‘Exports and economic growth in Asian developing countries: cointegration and error-correction models’, Journal of Economic Development, vol. 24, no. 2.
[10]	Paul, B 2014, ‘Testing export-led growth in Bangladesh: an ARDL bounds test approach’, International Journal of Trade, Economics and Finance, pp. 1-5.
[11]	Herrerias, M, & Orts, V 2011, ‘Imports and growth in China’, Economic Modeling, vol. 28, no. 6, pp. 2811-2819.
[12]	Kim, S, Lim, H & Park, D 2007, ‘Could imports be beneficial for economic growth? some evidence from republic of Korea’.
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[17]	Saaed, A & Hussain, M 2015, ‘Impact of exports and imports on economic growth: evidence from Tunisia’, Journal of Emerging Trends in Economics and Management Sciences (JETEMS), vol. 6, no. 1, pp. 13-21.
[18]	Ahmed, H & Uddin, G 2009, ‘Export, imports, remittance and growth in Bangladesh: an empirical analysis’, Trade and Development Review, vol. 2, no. 2, pp. 79-92.
[19]	Smith, E 2001, ‘Is the export-led growth hypothesis valid for developing countries? a case study of Costa Rica’, Presentation.
[20]	Gabriel, O & Charity, O 2014, ‘Growth evidence of imports in Nigeria: a time series analysis’, International Researcher, vol. 3, no. 2.
[21]	Muluvi, A, Kamau, P &Gitau, C 2014, ‘Trade and foreign policy division Kenya institute for public policy research and analysis’.
[22]	Gujarati, D 2012, Basic econometrics, New York: McGraw-Hill.
[23]	Johansen, S 1988, ‘Statistical analysis of cointegrated vectors’, Journal of Economic Dynamics and Control, vol. 12, pp. 131–154.
[24]	Johansen, S, & Juselius, K 1990, ‘Maximum likelihood estimation and inference on cointegration: with an application to demand for money’, Oxford Bulletin of Economics and Statistics, vol. 52, pp. 169–210.
[25]	Osterholm, P, & Hjalmarsson, E 2007, ‘Testing for cointegration using the Johansen methodology when variables are near-integrated’, IMF Working Papers, vol. 07. No. 141, pp. 1.
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APA Style

Maimuna Akter, Md Nahid Bulbul. (2017). Comparative Analysis Between Export-Led Growth and Import-Led Growth: A Study on Developing Eight (D-8). International Journal of Economics, Finance and Management Sciences, 5(4), 204-212. https://doi.org/10.11648/j.ijefm.20170504.11

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ACS Style

Maimuna Akter; Md Nahid Bulbul. Comparative Analysis Between Export-Led Growth and Import-Led Growth: A Study on Developing Eight (D-8). Int. J. Econ. Finance Manag. Sci. 2017, 5(4), 204-212. doi: 10.11648/j.ijefm.20170504.11

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AMA Style

Maimuna Akter, Md Nahid Bulbul. Comparative Analysis Between Export-Led Growth and Import-Led Growth: A Study on Developing Eight (D-8). Int J Econ Finance Manag Sci. 2017;5(4):204-212. doi: 10.11648/j.ijefm.20170504.11

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@article{10.11648/j.ijefm.20170504.11,
  author = {Maimuna Akter and Md Nahid Bulbul},
  title = {Comparative Analysis Between Export-Led Growth and Import-Led Growth: A Study on Developing Eight (D-8)},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {5},
  number = {4},
  pages = {204-212},
  doi = {10.11648/j.ijefm.20170504.11},
  url = {https://doi.org/10.11648/j.ijefm.20170504.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20170504.11},
  abstract = {The main objective of the study is to investigate the comparative influence of import and export on economic growth of developing countries in the world, using Export-Led Growth (ELG) and Import-Led Growth (ILG) hypothesis. The study has used purposive sampling technique and selected the member countries of D-8 such as Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey as sample. Total import, total export, and GDP growth rate, as indicator of economic growth, have been used as variables for the study.  The study has selected time series and panel data of the variables from year 2001 to year 2015. To detect unit root of variables, Augmented Dickey Fuller (ADF) Test and Phillips-Perron (PP) Unit Root Test have been used. Moreover, the cointegration among variables has been examined using Johansen Cointegration Test. The study has also used Vector Autoregressive (VAR) model and Vector Error Correction (VEC) model to define the presence of short run and long run causality. Finally, Granger Causality Test has been used to examine the presence of unidirectional and bidirectional causality among the variables in short and long-run. The study shows that the variables have unit root at level and have become stationary at first and second difference. In most of the selected countries, the study has found cointegration and unidirectional causality among the variables. In Bangladesh, both import and export have been found to contribute to economic growth in short run, and the relationship is unidirectional. Moreover, these have been found to influence economic growth of Nigeria in long run. On the other hand, the study has discovered economic growth and export of Turkey to granger-cause its import in short and long run. However, along with economic growth, import has been found to granger-cause export of Egypt and Indonesia in short run, and export of Malaysia in long run. Finally, Pakistan and Iran have been found to have no granger-causality among import, export and economic growth.},
 year = {2017}
}

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TY  - JOUR
T1  - Comparative Analysis Between Export-Led Growth and Import-Led Growth: A Study on Developing Eight (D-8)
AU  - Maimuna Akter
AU  - Md Nahid Bulbul
Y1  - 2017/07/06
PY  - 2017
N1  - https://doi.org/10.11648/j.ijefm.20170504.11
DO  - 10.11648/j.ijefm.20170504.11
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 204
EP  - 212
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20170504.11
AB  - The main objective of the study is to investigate the comparative influence of import and export on economic growth of developing countries in the world, using Export-Led Growth (ELG) and Import-Led Growth (ILG) hypothesis. The study has used purposive sampling technique and selected the member countries of D-8 such as Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey as sample. Total import, total export, and GDP growth rate, as indicator of economic growth, have been used as variables for the study.  The study has selected time series and panel data of the variables from year 2001 to year 2015. To detect unit root of variables, Augmented Dickey Fuller (ADF) Test and Phillips-Perron (PP) Unit Root Test have been used. Moreover, the cointegration among variables has been examined using Johansen Cointegration Test. The study has also used Vector Autoregressive (VAR) model and Vector Error Correction (VEC) model to define the presence of short run and long run causality. Finally, Granger Causality Test has been used to examine the presence of unidirectional and bidirectional causality among the variables in short and long-run. The study shows that the variables have unit root at level and have become stationary at first and second difference. In most of the selected countries, the study has found cointegration and unidirectional causality among the variables. In Bangladesh, both import and export have been found to contribute to economic growth in short run, and the relationship is unidirectional. Moreover, these have been found to influence economic growth of Nigeria in long run. On the other hand, the study has discovered economic growth and export of Turkey to granger-cause its import in short and long run. However, along with economic growth, import has been found to granger-cause export of Egypt and Indonesia in short run, and export of Malaysia in long run. Finally, Pakistan and Iran have been found to have no granger-causality among import, export and economic growth.
VL  - 5
IS  - 4
ER  -

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Author Information

Maimuna Akter

Department of Banking and Insurance, University of Dhaka, Dhaka, Bangladesh
Md Nahid Bulbul

Department of Banking and Insurance, University of Dhaka, Dhaka, Bangladesh

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APA Style

Maimuna Akter, Md Nahid Bulbul. (2017). Comparative Analysis Between Export-Led Growth and Import-Led Growth: A Study on Developing Eight (D-8). International Journal of Economics, Finance and Management Sciences, 5(4), 204-212. https://doi.org/10.11648/j.ijefm.20170504.11

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ACS Style

Maimuna Akter; Md Nahid Bulbul. Comparative Analysis Between Export-Led Growth and Import-Led Growth: A Study on Developing Eight (D-8). Int. J. Econ. Finance Manag. Sci. 2017, 5(4), 204-212. doi: 10.11648/j.ijefm.20170504.11

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AMA Style

Maimuna Akter, Md Nahid Bulbul. Comparative Analysis Between Export-Led Growth and Import-Led Growth: A Study on Developing Eight (D-8). Int J Econ Finance Manag Sci. 2017;5(4):204-212. doi: 10.11648/j.ijefm.20170504.11

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@article{10.11648/j.ijefm.20170504.11,
  author = {Maimuna Akter and Md Nahid Bulbul},
  title = {Comparative Analysis Between Export-Led Growth and Import-Led Growth: A Study on Developing Eight (D-8)},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {5},
  number = {4},
  pages = {204-212},
  doi = {10.11648/j.ijefm.20170504.11},
  url = {https://doi.org/10.11648/j.ijefm.20170504.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20170504.11},
  abstract = {The main objective of the study is to investigate the comparative influence of import and export on economic growth of developing countries in the world, using Export-Led Growth (ELG) and Import-Led Growth (ILG) hypothesis. The study has used purposive sampling technique and selected the member countries of D-8 such as Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey as sample. Total import, total export, and GDP growth rate, as indicator of economic growth, have been used as variables for the study.  The study has selected time series and panel data of the variables from year 2001 to year 2015. To detect unit root of variables, Augmented Dickey Fuller (ADF) Test and Phillips-Perron (PP) Unit Root Test have been used. Moreover, the cointegration among variables has been examined using Johansen Cointegration Test. The study has also used Vector Autoregressive (VAR) model and Vector Error Correction (VEC) model to define the presence of short run and long run causality. Finally, Granger Causality Test has been used to examine the presence of unidirectional and bidirectional causality among the variables in short and long-run. The study shows that the variables have unit root at level and have become stationary at first and second difference. In most of the selected countries, the study has found cointegration and unidirectional causality among the variables. In Bangladesh, both import and export have been found to contribute to economic growth in short run, and the relationship is unidirectional. Moreover, these have been found to influence economic growth of Nigeria in long run. On the other hand, the study has discovered economic growth and export of Turkey to granger-cause its import in short and long run. However, along with economic growth, import has been found to granger-cause export of Egypt and Indonesia in short run, and export of Malaysia in long run. Finally, Pakistan and Iran have been found to have no granger-causality among import, export and economic growth.},
 year = {2017}
}

Copy | Download

TY  - JOUR
T1  - Comparative Analysis Between Export-Led Growth and Import-Led Growth: A Study on Developing Eight (D-8)
AU  - Maimuna Akter
AU  - Md Nahid Bulbul
Y1  - 2017/07/06
PY  - 2017
N1  - https://doi.org/10.11648/j.ijefm.20170504.11
DO  - 10.11648/j.ijefm.20170504.11
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 204
EP  - 212
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20170504.11
AB  - The main objective of the study is to investigate the comparative influence of import and export on economic growth of developing countries in the world, using Export-Led Growth (ELG) and Import-Led Growth (ILG) hypothesis. The study has used purposive sampling technique and selected the member countries of D-8 such as Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey as sample. Total import, total export, and GDP growth rate, as indicator of economic growth, have been used as variables for the study.  The study has selected time series and panel data of the variables from year 2001 to year 2015. To detect unit root of variables, Augmented Dickey Fuller (ADF) Test and Phillips-Perron (PP) Unit Root Test have been used. Moreover, the cointegration among variables has been examined using Johansen Cointegration Test. The study has also used Vector Autoregressive (VAR) model and Vector Error Correction (VEC) model to define the presence of short run and long run causality. Finally, Granger Causality Test has been used to examine the presence of unidirectional and bidirectional causality among the variables in short and long-run. The study shows that the variables have unit root at level and have become stationary at first and second difference. In most of the selected countries, the study has found cointegration and unidirectional causality among the variables. In Bangladesh, both import and export have been found to contribute to economic growth in short run, and the relationship is unidirectional. Moreover, these have been found to influence economic growth of Nigeria in long run. On the other hand, the study has discovered economic growth and export of Turkey to granger-cause its import in short and long run. However, along with economic growth, import has been found to granger-cause export of Egypt and Indonesia in short run, and export of Malaysia in long run. Finally, Pakistan and Iran have been found to have no granger-causality among import, export and economic growth.
VL  - 5
IS  - 4
ER  -

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