On the Causality between Export Growth and GDP Growth : An Empirical Re-Investigation

Although conventional wisdom suggests that export growth contributes positively to economic growth, empirical studies on the causal links between exports and output have provided little support for the export-led growth hypothesis. This paper re-examines the direction of causation by handling properly two important issues in causality tests: the characteristics of the data, and the choice of optimal lags. The results of this study show that in a sample of thirty-two economies, the export-led growth hypothesis is supported by seventeen economies and is strongly supported by nine economies