Book Description

Numerous studies in the literature have tried to test whether export causes economic growth or economic growth causes export growth. The statistical approach has been one of applying Granger or Sims causality test to data drawn from individual country. In order to increase the power of existing tests, in this paper we pool data from 61 developing countries over 1960-1999 period and employ panel unit root tests and panel cointegration technique to establish the long rrun relationship between exports and output. Cointegration receives support in a model in which export is the dependent variable.